It needs work, but it could be good in the future.
They need servers. One Home cannot handle every PS3 user. Perhaps 1000 servers? Think WoW.
That's right. Less like a social networking sim, more like an MMO. Let people do other things. Give them trophies. Let them run races. Put in a shooting range. All of this is stuff they could do.
But at the same time, they shouldn't focus on this too much. Let SCE London take care of it, use the other studios for development. If there is a studio between projects, you can assign them to work on Home too.
From a business point of view, they need third party adverts. This will bring in a lot of revenue, some of which they can put right back into Home, and some of which can generally go to the company.








