I've done basic marketing so that isn't new to me, but I didn't really think about the whole of marketing in a console context. It makes complete sense really. I doubt that it is an advertising failure because everyone knows what a Playstation is, I doubt that telling them again is going to be of any significant help.
The fact is that an average person doesn't go:
Wow! It does Blu Ray? Upscales my DVDs? Connects to my PC as a media extender? Has a photo viewer? Plays amazing looking games? Etc.
They simply get confused as to what the hell it does, the longer the list of features the more peoples eyes glaze over. There is also probably a significantly large number of people who don't believe the PS3 is a Blu Ray movie player simply because it doesn't come with a remote control. VCRs come with remotes, DVD players come with remotes, TVs come with remotes but PS3 doesn't come with a remote. Even my Xbox 360 came with a remote...
Tease.
