This doesn't surprise me. PS2 was so massively successful because of it's wide appeal. Sony started the PS3 with a very narrow market appeal - the Xbox's marketshare (first game? Resistance) and undoubtably hoped to broaded out from there but... Nintendo came in and swiped the mass market out from under them.
To compete with the Wii Sony would have to drop the PS3 down to Wii prices, or lower (since Nintendo could easily drop theirs too). To do that would be disasterous profit-wise and in Japan and NA they'd likely still be outsold.
So better for them to forsake 1st place and worry more on profitability. If they truly plan for 10 year lifespan, they can work on expanding their marketshare in 2 years when they can lower their prices to mass market levels profitably.
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