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Of course Sony's 10 year plan failed.. They thought they'd be having a little under PS2-like success but over a longer period so that eventually they'd have as much or an even larger install base. The PS3 will last around 7 or maybe even 8 years only because Sony will push it for as long as they possibly can and it has a lot of room on it's price..

However that said, they will release a console in 2012, i'm sure of that.. 10 year plan doesn't mean no console for 10 years, PS3 came out in the 6th year of the PS2's life and that console is very much what Sony aimed for with their 10 year plan.