Any system that
1.) survives less than 2yrs due to low sales compared to competition (sales watchers/market confidence)
2.) does not have a sequal (loyalists)
3.) does not have a significant library of games or third party support (gamers in general)
4.) loses a company money (stock owners and company employees)
can be considered a failure by their respective groups.

Some systems fit ALL of these, some only a few. Usually a system has to fit at least 2 of these for most to consider it a failure.

Lets look at the PS3:
So far the PS3 seems to be meeting 1, 3, 4 with the potential for 2.
Now 4 could be fixed if 1is overcome.
3 will only further influence 1 which will further influence both 4 and 3 which can lead to 2.
1 can be fixed if 3 is overcome but 1 influences 3 by way of self-fulfilling prophecy.
2 is a risk because of 4 and Sony's restructuring.

The wild card is Blu-ray, a gimmick of the gaming device that can leverage 1 thus helping overcome 3 which helps overcome 1 which leads to overcoming 4 which ensures 2 does not happen.