What OS are you using? I have a feeling this is going to be a Win10 issue in which case you need somebody to test it on a Win10 system.
However a bit of research suggests this type of error can be caused by not having MS .NET Framework installed or not having it fully updated. Is there any error code provided with the failed to initialize message? I'd look into that if the following suggestions don't help.
If you did not download it from Xbox-HQ I'd suspect the download.
Some Xbox PC tools can cause problems with any active anti-virus software you may (should) have but I do not remember the shortcut maker being one of the them.
Auto-Xbins, Xbox Font Maker, SPPV's XMV conversion tools among a few others can provoke this reaction. Your AV maybe seeing the shortcut maker as a PUP (potentially unwanted program) or even blocking it on low reputation ratings. That sort of stupidity is not unknown so try to find out if that is what happening.
I can confirm the Xbox Shortcut Maker v1.0 works with both Windows XP 32bit and Win7 64bit at default settings ie. no compatibility or admin permission settings required.
I've just downloaded it from here and can confirm it does launch on my Win7 64bit system without any problem.
That must mean there is nothing wrong with the download itself that would cause the 'failed to initialize' error. I'd still try downloading it again though.
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