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Have "live service" games ever done well?
#1
The only live service that I believe has ever sold well, and continues to do well is the revamped Assassins Creed games, besides that most do semi-well or flop on release.



#2
AC would actually be the opposite of "live service". The concept of live service has different, albeit still related roots, and only continues to grow in different directions.

Best way to explain it would be that live service games are basically those that keep you trying to playing (typically a single game) for as long as possible, usually promising endless content/experiences. It was much more common before that you played games and then put them down to play the next one. If you kept playing then that's cool but your time wasn't as important as your money was.

However, the industry has realized that time absolutely can be money. While the rise of online multiplayer and the addition of loot boxes and season passes has expanded and muddled the concept, traditionally speaking MMOs would count as a live service game. Whether you're continuing to play and pay money through a subscription or you're paying for expansions, the goal is the same: to keep you playing and to keep you paying.

But as I mentioned before, loot boxes and season passes/battle passes offer a new and much quicker paced version of that. Battle royales are the perfect example of live service games. So is Destiny. The goal of these games is to keep you playing and to make sure this is in your main game rotation. They want you to keep coming back through updates, expansions, and even the smallest additions such as time-limited content because FOMO is a bitch. They want you to keep the game installed and boot back up here and there to earn or spend money in hopes that you get a dance emote.

AC wouldn't count because while they are hoping to sell you on buying a season pass for the promise of more content, they do expect you to move on to their next title which is a much different game. They want to keep the same fans (and your money), but the games are separate projects. Fortnite on the other hand, probably won't have a sequel. They're going to keep milking that for as long as they possibly can. Destiny did eventually get a sequel, but only after supporting the first game for a few years.

To make it more understandable and yet possibly less understandable, I would look at Call of Duty. Mainline Call of Duty games are not live service games. They'll release maps and other content, and they have rotations between their different series, but even though the servers will stay on they do expect the a lot of their population to move on to the next title. These games are not simply copy pasted and are separate projects.

Call of Duty: Warzone on the other hand IS a live service game. It is one singular game that they are constantly updating here and there, and possibly will continue to do so even by integrating other Call of Duty content within it.



#3
I don't know if I can agree that AC isn't a live service, but the rest of your points are pretty valid