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The 360 is a success in profits and it greatly increased XBox's market share. Whether it will really become the success MS wants it to be is still unsure.
As far as I know MS wants to be in every living room, the tv/movie market is still way more profitable then video games. However the console mainly stayed in dorm rooms and bedrooms. Thus enter Kinect, family games and the shift in focus to tv and movie apps.
Kinect is doing well so far although it's not quite exploding like the Wii was. The jury is still out whether Kinect + 360 will become the new way to watch tv.