That graph is technically "correct," but it's also highly misleading. MS has spent a lot
of money getting into the console space. But those costs are sunk costs and don't get measured in earnings reports going forward.
There's been a lot of press lately that's been covering current and former MS execs who have talked about MS's "stop Sony at any cost" mentality. They were originally considering buying out Sega in order to slow Sony, but decided instead to start up their own console platform from scratch. Very expensive choice, but they're goal from day 1 has been to keep Sony from taking over the living room. Which is also why MS is now pushing so hard on the media front, and doesn't seem to care much about gaming performance (just look at the recent comparison
of both upcoming consoles). It's clear that MS dropped billions in order to keep Sony from dominating the living room, and that continues to be MS's driving motivation.
In any event, MS has been making profits steadily through subscriptions and media partnerships (not so much through games or gaming hardware). Those initial losses don't matter any more.