Sony sold the bucket loads of PS1 and PS2 it did because it managed to get the system to almost everyone buying consoles at that time.
This gen so far the Wii ias hoovering up that market while Sony has got itself locking into more of a hardcore / HD gaming battle with MS.
MS is the only one of the three i'd say that is truly locked in to a narrow demographic and over time if they don't solve that they will always eventually finish in third place as the harcode/lonline MP market is much smaller than the more casual console gamer.
Nintendo has always played well to a certain demographic but has never really appealed to the gamers seeking PC style FPS/online MP games (and I don't think it ever will).
Sony previously (by luck or design or a bit of both) got the balance best and if there is any hope for PS3 to really take off its that they continue to make momentum across multiple demographics... so OP I'd disagree, if they want any shot at much better sales they must appeal broadly and not just to the hardcore.
Try to be reasonable... its easier than you think...
