I think the idea of the model is a fascinating one, but here's one reason I don't think it works. Such a model is aimed at the demographic for whom it's difficult or next to impossible to save up a lot of money--mostly kids. Thing is, a kid is way more likely to get a system as a present or something one time, then be set for years. There are very few kids who have a $50 allowance, and even if they did, that wouldn't even include games. It's more realistic, even for someone with little to no income, to save up enough for a system/be gifted one, then buy games whenever possible. But of course that's all purely theoretical.
Microsoft was toying with the model, weren't they? It would be cool to get some financials from that, though I guess it didn't work out since they didn't pursue it further. I honestly wouldn't be surprised to see more stuff like this in the future.
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