The fact that Sony-published titles are consistently underperforming, even relative to install base points to a deeper problem. What was supposed to be a strength for Sony has hardly been a factor from a business standpoint and that points to either the "first party first" strategy being a poor one or being a poorly-executed one.
Sony's first party titles were planned to define the PS3 platform experiences. There are also technical requirements to share technologies to other PS3 devs. I see many titles have non-traditional themes. Some push the envelope in risky ways or even abandoned proven formulae (e.g., Afrika, Folklore's and Lair's SIXAXIS, LBP's user generated levels, KZ2's cinematics and "weighty" controls, etc.)
In the end, not all of them are well-received (In fact, most aren't if we judge by sales volume). Some of them will perform badly even on 360 because the chosen themes or implementation approaches are unpopular/off-beat amongst hardcore gamers. At the same time, it takes time for the devs to polish the innovations (e.g., LBP will take 1-2 more iterations to perfect).
The other problem I saw was business mistakes. e.g., Insomniac abandoning R1 user base completely, KZ2 lacks a party system, ... As a result, growth was stunted.
I don't think the problem is with Sony's first party strategy. If they can tune their efforts based on user needs/demands, they should do better. The first party innovations does separate PS3 from 360. Without which, both consoles would be too similar.
It's something they have to be careful though. If they dominate PS3 game sales, then people will cry Nintendo. Nonetheless, if they managed to work out the kinks, the first party franchises can be a great competitive asset.
It's also worth noting that third-parties (the exclusive MGS4 included) don't seem to be having the same problems selling to expectations relative to install base.
Not all. Valkyria Chronicles is innovative and entralling, but it doesn't sell well in US. OTOH, something like LBP may help to anchor the casual market should (i) PS3 price drops, and (ii) Media Molecule improve the formula for casual gamers. A bigger success can be built on smaller one(s). It took CoD 4 tries, and Halo started 1-2 iterations on the Mac first.
The other Sony problems are age old:
* Wasting/duplicated resources
* Untimely, unfocused development
* Delivery based on technical schedule instead of market demand
These issues prevent Sony from simplify the PS3 user experiences. They may also slow down deployment of future technologies.
Finally, these sales numbers are the final outcome. But they also embody marketing influences. As a casual observation, I remember seeing Microsoft dropping prices to promote sales via various retailers. Sometimes, this is done when Sony launches a new competing IP. At the end of the day, if Sony is after profitability chiefly, their playbook will be limited.