Maybe the truth is Sony really isn't all that "tough" when they face tough competetion.
Lets be honest, the Saturn was a trainwreck of a machine, mismanaged and poorly marketed. The N64 being cartridge based gave Sony every major third party practically exclusive.
The Dreamcast was a good system, but by then Sega's brand had been damaged badly and EA and Squaresoft would not give them the time of day. The company was also in massive debt and couldn't afford to keep the system going.
The GameCube and XBox launched 18 months after the PS2 in Japan and 12+ months after the PS2 in North America + Europe. I mean that generation was over before it even started, you can't give the established market leader that long of a head start.
The PS3 and PSP are the first time they've faced tough head on competition without a huge (I would say unfair) advantage in third party support and a year+ head start against two companies that are also now very good at marketing (Sony and the new Nintendo).
We've seen Sony can't dominate at all when they have to fight on more even turf and rely moreso on their 1st party games to sell systems.
