Phantom Console: I'm so confused

Newsforge has this bit on the new Phantom console made by Infinium Labs. The whole thing in a nutshell is best described by NewsForge

Let's start by saying the console is real, not vaporware. I've seen a working prototype in action. Inside the spacy-looking case it's just a PC running Windows XP that has no CD or floppy drive, and uses a proprietary encryption scheme for data stored on its hard drive.

So that's great so far, it actually exists and works. But encrypted data on the hard drive, and no CD or floppy drive? How will you get the games there? The article states you will pay a subscription and download the games from Infinium's servers. While some games may be offered for free, or free trials, you will still have to pay for the games on top of a subscription. The upside is that any game that runs on Windows XP can be sold through this service, which makes the library potentially huge. Every game ever made available for download at a click, and guaranteed compatibility. If it sounds too good to be true, read on...Here is another little tidbit to chew on from the article

Really, the only thing that differentiates this 'game console' from a standard, Windows-running PC is that it has no way to get data on or off of it except through a dedicated connection to Infinium Labs' own servers via your broadband ISP, plus the fact that if you try to open it up or modify it or grab data from the hard drive, bad things will happen, starting with violation of the terms under which you will lease or purchase the Phantom.

Two strikes, it requires broadband and it requires a subscription. Now, neither of these are showstoppers, there can definitely be a market for this kind of device. They state in the article that they are not targeting the hardcore crowd, but families and working parents. They include the ability to have strict parental controls on the device, on a per user basis. Parents can set the violence level for their children, and that is a great idea.

Another strength talked about in the article is increased distribution of smaller titles. Infinium games are no longer limited by shelf space at Best Buy, anyone can be published and be just as visible as the latest Final Fantasy. Candy Cruncher and Grand Theft Auto, side by side. And all you need to start development is a Windows PC. This could be a great boon to independent game makers

The subscription price can help subsidize the hardware, which is right now a pricey $400. To their credit this includes a wireless keyboard and mouse, and is in almost any respect a full blown gaming PC. Another way to help with the cost of the console and subscription is advertisements, which is also being talked about by Infinium. Which brings me to the part that makes me queasy

As one industry observer pointed out when he first heard the Infinium Labs story, "You buy the console. You buy the games. Then you pay to play the games you bought on the console you bought. It's sort of like buying an arcade game but still having to put quarters in. And ads!"

Over and over consumers have proven that they are not willing to pay for a product they do not own. People will pay for services all the time, but a product is expected to stay purchased, not randomly disappear after you've bought it. Look at the old Divx players, or the Turbo Tax DRM scandal, the second a consumer buys something and it is no longer there, they want their money back.

I don't know about you, but I don't like the thought of paying $10 a month to have access to $50 games to play on my $400 console that will become useless the second I stop paying $10 a month. If the games stayed on your HDD, and you could re-download them whether or not you still had a subscription, it would be different, but the article states this isn't the case.

All game keys are held on Infinium Labs' servers, so even if the kind of people who do Xbox mods do their thing on a Phantom, they won't be able to play games for free, unless they're some of the many "play before you buy" trials Roberts plans to offer or some of the games that might be included with the $9.95 per month

Notice the slight of hand there, with the XBox Modchips. It is the writer, not Infinium, that put that there, but the implication is the same. They do this to stop pirates. Games will be locked down, you cannot play them unless Infinium says it's ok. What if they pull a Hiptop and remove your favorite game, that you paid for? Tough. I just can't endorse any company who fights the ghosts of pirates at the expense of their own customers. Which has me torn, because otherwise the Phantom seems like a great idea.