The PS3 doesn't suck. But it did suffer from three clear issues at launch which shaped an initial perception I think:
a) most damaging Sony seemed to have asked MS for advice on how to promote the console, 'cause they couldn't have made a worse job of it even if they asked MS to handle marketing for them! Stupid comments about 'get a second job' etc. etc. Just really really poor PR that made me put of buying one for a long time and definately went down poorly in US and Europe.
b) second most damaging, lack of gaming content during first year, compounded by releasing after 360 and having to compete with a similar spec'd console with mostly the same games plus a lot more. Again, this was particularly damaging in the US. Linked to this was a sense of 'too many irons' in the fire - they were talking about games, about TV, about PSP linkage, about PSN, etc. but everything seemed to be progressing at a snails pace (still is in some ways, and I say that as a PS3 owner)
c) third, while the inclusion of BR suited what I wanted from the console it was clearly a risky choice, and one that while it will now probably pay off in long term hurt the console terribly at launch (again, particularly in US). Now gamers had to accept purchasing a next gen movie player and next gen console at the same time - and many clearly didn't want to.
So now the price is down, the library is looking not bad with a lot of big hitters to arrive this year and ongoing, and BR looks poised to win the format things are definately looking better. Couple that with end of year 1 sales WW seeming to match 360 after more than two years in the market, and PS3 just squeezing a holiday win and Sony is probably breathing huge sighs of relief.
However I don't think they're 'out of the woods' quite yet, although they're close. The negative perception is taking time to leak away (again, particularly in the US), they still need to withstand whatever MS tries this year to boost sales (price drop, etc) and they still need to deliver on promises made but unreleased - PSN improvements, LBP, strong links to PSP and innovative games. These things feel a lot closer finally - but until they land, and until PS3 steadily outsells 360 WW they are not out of the woods, but they probably have a pretty good view of the promised land through the branches right now.
Try to be reasonable... its easier than you think...
