It was a failure at release. It didn't pickup til Dark souls games came and started to become a cult classic and beloved.
That is very wrong. It didn't have AAA-level sales but it also didn't have a AAA budget nor AAA aspirations. It sold over a million copies, it was a Greatest Hits (over 500K) title in the US. Atlus initially expected only around 75K copies of the game to be sold and it massively surpassed their expectations. Calling it a failure is to completely ignore reality. Demon's Souls was a cult classic and is very much the reason Dark Souls got so much initial hype.