"What Could Have Sony Done Different To Make The PS3 As Successful As Its Predecessors?"
Answer: Nothing.
When the Playstation came out Sega dropped the ball with the Saturn and developers preferred CD over the N64's carts. This created what was essentially a one console market. All you needed was a Playstation and you were guaranteed more games than you could play in every genre. By the time Sega redeemed themselves with the Dreamcast the Playstation brand was so huge that gamers ignored the Dreamcast's excellent library and waited for the PS2 based on memories of the PSX and all the promises Sony made about the power of the PS2. Developers just moved from the PSX to the PS2 and it's user base grew to epic proportions even if it's capabilities could never lived up to Sony's promises.
But then Microsoft joined the party. They threw money at developers and even though the Xbox failed to toppled the PS2, it successfully did one thing. It split the market. While Nintendo continued to live off in Nintendo land like it always has and still does, the Xbox and PS2 exist as two sides of the same coin. Tomb Raider was on both, MGS was on both, and Microsoft published exclusives to counter Sony's, like Forza and Halo.
Then Microsoft hit the market with the first 7th gen console ensuring developers would support the only game in town. Xbox Live grew into it's own and online gaming went mainstream. Even if Sony hadn't priced themselves out of the market with the PS3, they still couldn't undo the loss of exclusive developers or the loss of mind-share.
Devs and Publishers can no longer release games on one system and expect to make enough money. They need their games on as many platforms as they can port to. And if both systems have great games, consumers will buy either one.
I guess if Sony released the PS3 a year before the Xbox 360 and at a reasonable price point it would have helped. But I doubt even if they did that the PS3 could have sold like the PS2 or PSX. The Xbox 360 has too many great games that people want to play.
Both systems are worth owning and therefore the market will remain split and I expect it to continue to be split through the next generation. That's a good thing in my opinion. If all three companies own equal portions of the market then they will fight over 1% market shares. We win because of competition and we won't have to worry about losing another like when Sega dropped hardware.
