This will benefit the hardcore considerably more than it would benefit the casuals. That's a terrible business model for a company looking to move 100 million units over the lifetime of the device. It's basically the opposite of what we've been hearing whispers about, in that MS is thinking about having you pay affordable monthly fee's for the hardware as long as you're subbed to their online services. If you were to put a program like that up against what you described, the monthly hardware model is going to see much greater success in terms of moving hardware. Paying for things up front is not the future, let alone the present, it's the past.
I didn't propose it, but it is also possible to have the same 600 USD paid monthly for those who want. That isn't the most critical part of the idea.
But yes the biggest benefit would come to people that buy the games new and perhaps 2 years after launch (so new games cheaper and the console already discounted). People that buy very few games certainly would perceive as it being less interesting idea.
You made the thread didn't you? The problem is you're starting to make it much more complicated, and with consoles the point is to make it as easy and simple as possible. Having a bunch of different ways to get your hands on hardware in terms of payments, opens the flood gates to everything else. Why not a bunch of different ways to get your hands on games in terms of payments? Why not just have 10 different hardware models, all with mostly the same core necessities, but with price options? Why not a bunch of different storage models with different pricing? Why not a larger cased model with better cooling for a higher price? Why not a model of every color for different prices?
The fact of the matter is a bunch of these things will come at a later point in time, and will be priced differently, usually lower, so the main difference is waiting. There's nothing wrong with having to wait a while, as long as a life isn't at risk. No options isn't good, but too many options isn't good either. The only reason you see MS tossing out every option under the sun, is because they are trying to find the option that's the cash cow. If they ever find it, like PS has, they will at the very least slow down with the options, if not put them on hold.
A cheap console with more expensive games makes the most sense for one particular reason. People need the console to be able to play the games, the same console for the most part which they are ok with for the most part, and yet they all want different games. So you make the console the same cheap price for the most part for everyone, and you charge different prices for different games. That way nobody can really be upset about the hardware cost, and can choose to pay for the games they want to play. Having others basically subsidize the games through the console price so you can have cheaper games because you are going to buy more and will save more money, allowing you to buy even more, isn't going to fly for them.