Both are absolutely important. For the first part just ask MS haha. The original Xbox lost over 4 billion and who knows how much due to research and development before it even came out. However they sold 25 million units (thereabouts) which was good enough for second place... even over the powerhouse of the industry that was Nintendo. Because of that they got an invite to the next generation where the Xbox brand has really taken off (although almost destroyed by hardware failure). If you were to ask them simply on a profit level it would be bad but hardware sales made the original Xbox a "success" for them to move on to 360 which has done very well for itself.
Nothing is ever so clear cut. Yes by the absolute definition in business, success is determined by profit. There is no other way around it... that determines success. But achieving brand appeal is a start to success. Only way to do that is to get the name out and hardware sales determine that. If every company simply stopped manufactoring because they didn't make a profit then the economy would fail. There always will be risk analysis. Some times trying to achieve something in the long run is more important than making a quick profit. Of course all companies would love to do what Nintendo did... have immediate success and profit hugely from it. But that's ideal, not realistic.
People need to understand this isn't clear cut. There isn't those who profit and those who don't. There are many factors in economics and there are many factors to success. The ultimate thing for success is profit but there are many bridges to cross to get there. Also we need to realize at the heart of a business is risk analysis. Sometimes you have to take a risk to have future profits.
