Maybe something like automatically having the right to take the balance owed from their bank account. Example when you sign up for something using a credit card and forget to unsubscribe they automatically take out however much it costs from your account. 

maybe, but it is easy enough to cancel a credit card.  there is a pretty substantial amount of legal involved in getting a phone.  this works for ATT, verizon, ect because they've been doing it for years.  not sure a sony could pull it off on a whime.  i suppose MS did though so maybe i'm blowing things out of proportion.

I liked the article and in no way thought about it being against xbox until reading these comments. Anyway I hate subscriptions like this. As long as I have the option to pay upfront and get whatever model I want then I'll be happy.

I don't see the point of having to pay for a console in small batches. I mean sure it's useful when you buy something like a TV or furniture, but that's because those types of luxuries are usually $1000 or more. If you can't afford to pay up front 400-500$ for a console then to be honest you shouldn't even bother buying one. Spend your money on necessities not luxuries. Not to mention if you can't afford a console then how are you gonna afford paying 60$ for a single game.

"The third big issue with this model is that Sony would actually lose money from it's hardcore fans. Whether you like it or not, the PS3 sold almost 4 million units in the first 4 months the console was on sale (that's at $599)."

... What?

PS3 was selling  at a $200 - $300 loss at it launch (Razor Blade Business Model).

So he's saying that early on, because demand for a new product like a Playstation is in such high demand, it would cause Sony to lose even more money.

Were there an option to get the system for a subscription that added up over time to something like 900-950 I think they would be in a better position. Yes the system sold for a huge loss, and yes initially they would have even bigger losses, but 2 years later, things would have looked much better financially than what actually occurred. 

The losses you're talking about were said to be because of a manufacturing cost of about 805~850. Factoring in stuff like marketting, retail margin, etc. I'm sure the losses were closer to $300 mark in your stated range on each system. SONY being able to squeeze out another $300, or even $200 in the long run would have done them wonders. Also, cheaper initial price would leave consumers on a tighter budget with more spending money for games and controllers. The faster growth of the install base could have also led to more 3rd party support. Still not covering the huge losses, but SCE could likely hold out. But ehhh... we'll never truly know now.

It is such an easy concept and how they deal with people not paying monthly.

Say you buy an Xbox 720 at 200 dollars and for 2 years you pay 15 bucks a month to play online. Say you pay for the first 3 months and the 4th month you don't have the money. So Xbox just cuts your Gamer Tag off from getting online until you pay the 15 bucks. Simple as that.

That's not a very helpful business model or solution.

Ok...so you cut said person off.....but if they still don't pay, you (MS) are still out of money for the system.  And then in the  end, the consumer still gets to play their disk based games.

If that's your great solution, "We'll just cut the bastards off", then whoever might endorse this would probably be fired quite quickly.

There are really no negatives here aside from the small potential of people not paying up, and if they require checking accounts or something else just to sign up, even that risk it minimal.

But the positives far outweigh them. You get more consoles into homes earlier in the generation. This puts more software in homes and makes Sony more money. While Sony loses more money upfront on the expensive hardware, they are still collecting money every month to offset that. And for gamers, if you plan on buying the console and owning it all generation, a cheaper entry fee might be what you need to buy the console, as opposed to waiting for a price drop.