I'd say yes. Looking at sales numbers alone won't tell you much. Instead you have to look at the big picture. While I think the XBO will sell ~40M-45M in the end, the problem is what it took for them to get to those numbers. Namely firesales. It seems that a lot of the budget for Xbox went into subsidizing the price. While this helped, it still didn't lead to them taking back any market. In fact, I think this is what lead to my next point.
It's more important to look to see if MS see it as a failure. And on this issue, I think we can safely say yes, they do. After the firesales, the budget for Xbox seems to have been slashed significantly. Before, they were bragging about having AAA exclusives, even if a few were timed, but now their time is reserved for pushing timed indie exclusives. Quite the downgrade. This also cut the budget on 1st party games, which led to cancelling a few of their larger ones. And when we started to see a lack of 1st party games, they move the remaining ones to PC, giving the XBO even less of an identity, in an attempt to compete with Steam. Advertising also took a hit, whether it be for the XBO, itself, or AAA 3rd party advertising deals.
