I think it all depends on how one defines "successful".
If it is meant in the sense of "would Microsoft make more or less money with the Xbox brand if people could play online for free?" then I'd say no, they are making more money by charging for it.
IF the 360 had free online gaming, hardly anyone would be willing to pay money for the remaining stuff (despite what many 360 fans claim), so Microsoft would earn less money. And while more people would then be interested in buying a 360, Microsoft would have to raise the console price so in the end probably even more people would lose interest in the 360.
Let's face it, Microsoft wants the Xbox brand to be the Lexmark of gaming consoles, and that strategy is quite successful indeed: Sell a very cheap "starter pack" that attracts lots of people who only look on the price tag and don't really consider follow-up costs, then charge ridiculous amounts of money for just everything.
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