Overall, no, not a failure (its already doubled Wii U sales). However, with the fact that they were neck and neck with PS3, even with the RROD issues, the fact that they ended up so far behind PS4 was unexpected.
The reason why they ended up so far behind was clear the day XB1 was revealed, but who could have predicted that entire mess, after the 360's success and before the XB1 announcements, is beyond me.
They have done a decent job recovering, but trying to fight PS when they are on their game, has been a losing battle so far, no matter who you are.
To make matters worse, Switch looks to be rather promising as of now, and having to fight a "reborn" NiN and PS, will be like trying to climb Everest without a guide(NiN), nor oxygen(PS).

Its not a failure, its a relevant and viable platform.

But bad decisions kept it from being more successful.

Consoles in general have really moved into PC lite. They're essentially PCs. But given MS also owns Windows it makes sense for them to put their games on PC. Thats extra revenue on their platform. Meanwhile Sony streams some of their old content on PC for extra revenue. There are people on PC not playing consoles, so theyre both vying for some money there.

For comparison sake, I dont consider PS3 a failure for not hitting sales targets. Its biggest failure was losing money, what seems like billions. Wii U on the otherhand was a failure for not being viable, userbase was too small. Xbox One doesent appear to be losing money and it does a good job moving software to justify support. Thats the primary reasons I dont see it as a failure.

This is also an era where not much money is sacrificed to move hardware. So its unlikely theyve sacrificed a lot of resources to be competitive. Not like last gen where hardware was sold at a huge loss.

If a console fails to capitalize with sales around the world than its home and shadow turf, then it's a failure. The console has been only a below average fare for MS keeping in mind how 360 performed.

yes, the proft doesn't matter, the number of consoles doesnt allow microsoft invest in new game, the main exclusive ip lost relevance, lost studios, canceled games and the play anywere. in the end with profits or not the relevance of xbox is outworn.

True.

for me as a customer, I need something to convince me to choose between ps4 and x1.

i loved my 360 and was sure to buy x1. a very good friend of mine and me, we buy the same system, played dark souls together online, exchanged games... and then the presentation: BOOM.

all you need for the living room? used games lock? kinect a must?

WTF

so my friend and me switched sides and both bought a ps4.

ok this was years ago, now, i am a consumer who already has a system of this gen, and i need a reason to buy another. hmm, kinect (i never tried it on 360 in my life and i never cared), i never watch tv as such, cancelled my netflix abo, more into blurays with good sound system, any exclusive games so i buy a x1?

well, this switch thing costs only 300 bucks and mario looks promising, and it's time for me to play another zelda, and there are even talks about monster hunter  

yes, microsoft, quick question: Why sould i buy an x1? tell me. a new console for lets say 3 exclusives Which may interest me? anything else? what is left of the living room machine? i think, i am happy they didn't fool me back then, because i am sure some services are abandonned by now. like the dead kinect.

no no, i buy the switch, amazon got new machines in abt. 2 weeks

No, the Wii u was a failure, the XboxOne just lost to Sony PS4 but it hasn't failed.

How do you define success? I think that's the big question. As a competitor against the PS4, it could be seen as a failure. As a successor to the X360 it could be seen as either; it's still on par sales wise and didn't suffer from the RRoD fiasco, but it's supposed to exceed the performence of the 360, not simply keeping up. Is it turning a profit for MS? Yes, which makes it a success for MS.

All in all, I'd call it a disappointment. A failure? Maybe.

NiN is smart to go the Switch route. It allows them to be innovative and different enough that they can be someone's sole or second console. This makes it really tough for MS since they are basically competing directly with PS, but losing badly, head to head. I really don't know if they had kept the media box push going but dropped the DRM, AOL, price, etc, whether or not they would have faired better or worse as the gen went on, and now that Switch is here. If MS learns their lesson, "next gen" will be quite interesting in terms of sales. 

I definitely wouldn't call it a failure, but when I look at the Xbox solely as a console for playing games, it doesn't have much going for it compared to the PS4 imo.