The Kinect sold insane amounts at the height of its popularity, breaking all kinds of records in the process. Microsoft's sole error was thinking they can base another generation on that idea, in a time when Kinect bundles were selling because they were like a hundred bucks, the PS Move was flopping and the Wii (or the Wii U) were on nobody's minds anymore, certainly not for the motion controls. They should have stopped at X360. The peripheral was great for what it was, a cheap 3D camera that allowed for fun party games and that, to this day, is an affordable option for homebrew applications (even at work we used a Kinect for a project as late as 2019).
I see a lot of the errors made with Kinect in regards to VR, with more than one dev thinking VR will be the way to play in the future, focusing hard on bringing a niche tech to a broader audience that would actually enjoy it for 10 minutes before moving back to whatever they were doing.