The original Halo was not a monster hit at first. It was a thing that grew over time, kinda like GoldenEye. Its legs were amazing and that's why it's so popular.
Save for Halo, the Xbox was weak and even when Halo was first ported to the system from the PC, it wasn't sharp at all at any of the playable demonstrations until a few months before launch.
The Xbox started out as a bulky system with an unpopular controller for fat hands, the prospect of an online service that people were unsure of (there was no real basis for an Internet service model like XBL before it) and lots of shovelware.
Microsoft has definitely gained momentum, and while they've made a lot of mistakes, I've got to give credit to 'em, they definitely learn from every single one and come back with more resolve.
Oh, I'm not saying people didn't come around to it. In fact, they have. It's become a fixture of the mainstream now and I think Microsoft has done some great things with the console. To me, it's the perfect blend of what I like from my Nintendo and Sony consoles.
In the beginning though, you'd be hard pressed to find Xbox fans unless they were paid by Microsoft or just retarded. Now I think casual Xbox fans outnumber the retarded ones.