I believe that MS didn't do enough positive PR events to fortify it's company image/brand on a worldwide level with the 360. It knew where the xbox brand stood to the majority of the world but didn't really take it seriously. It focused almost exclusively on the US and trying to make them happy.
The attempted DRM policies weakened the already weak xbox brand worldwide. At launch, it was a hundred dollars more expensive and it had weaker hardware than the it's main competition. It took a long time to drop the kinect.
So yes it's launch has alot to do with it's slow sales. It hurt the xbox brand even further. It's extremely difficult to change a consumer's mind on a product's percieved value and what they think of a company once their mind is set.
