In my view, I think they squandered it. I thought they would have had some decent titles lined up for this year and give people plenty of reasons to pick up the console around the fall to dissuade some people from picking up the other next gen consoles (or at least make it difficult for them to chose), but their efforts could not be further from this. I do like their lineup for the 2014, and that year appears to be a very promising year for the console judging by the software.
I think a big part of it, as you pointed out in your post, has to do with HD development. I get the sense that's why they have reached out to some third parties (with experience in HD) for some titles. Either way, I hope they get their act together next year.
Playstation = The Beast from the East
Sony + Nintendo = WIN! PS3 + PSV + PS4 + Wii U + 3DS
