I'm of the opinion it's NOT very successful, in the same way PS3 is NOT very sucessful, at least not yet. However, imo it's current successes can be put down to:
1- Definately the one year head start...
2- Linked to the one year head start; Live. If you have friends that are already on Live, you're gonna buy the console that has Live and your friends
3- Halo
4- Gears of War
5- Cheaper than HD competitor
6- Easy to develop for
7- MS giving up on PC gaming (I daily shed a tear for Ensemble Studios... OK maybe not, but I loved AOE)