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Xbox 360 or PS3 for free, but on a phone-like contract?

You'll pay more in the long run on a contract, but here's the kicker -- you'll get upgraded to the latest and greatest console when you renew it

Here's an idea. You've probably got a mobile phone that came free on your monthly contract. It's a very popular business model around the world -- but would it work for gaming? What would you say to having a games console -- such as an Xbox 360, PS3 or Wii -- for free, but on a contract?

With phones, networks give you the handsets for free (in Europe, at least) because they make a profit on the tariff. Let's say the Xbox 360 was free on a kind of contract: you'd pay nothing for the console upfront, but you'd pay a monthly fee for three years. If you bought the console with one game on a typical credit card, for example, you'd pay £14 a month. That's £550 over three years, based on a £379 console, game and extra controller, with 29.9 per cent APR (source).

So how about paying £12 a month for three years, with a game of your choice each month that you post back in exchange for a new game? You'll pay about £16 a year over the top of the base price, but here's the kicker -- you'll get upgraded to the latest and greatest console when you renew your contract.

In total, you'll pay £420, not £550, and the company selling you this console contract will make a profit and have a steady revenue stream for three whole years. That, ladies and gentlemen, is a business waiting to happen.

It's not a loan any more than a mobile phone contract is a loan. You could ask for extra games each month which would be added on to your next bill, just like calls and extra text messages. It's ideal for people who can't afford a console in one lump payment and who only want to play games once.

Stupid idea? Great idea? Questionable idea? I'll be sitting in our forums for conversation, or leave a comment below.