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Report: Microsoft to Discontinue Microsoft Points

by James Plafke | 9:45 am, January 24th, 2012

Inside Mobile Apps reports that a “source with knowledge of the company’s decision” claims that Microsoft will be phasing out Microsoft Points, its system of currency, by the end of the year. Affecting developers of Xbox Live, Windows Phone, and the Zune, Microsoft Points will be replaced by a system in which the user makes purchases with real money, rather than paying real money to buy points, then using said points to make purchases.

The change is said to take place by the end of 2012, and when asked about the situation, Microsoft plead the old standby, that they do not comment on rumors and speculation. Reportedly, however, mobile developers are being warned by Microsoft of the upcoming change, and that they need to prepare their pricing according to the new monetary system.

For customers that have existing Microsoft Points sitting around, waiting to be spent on a rainy day, they will simply be converted back to real currency, and can continue to sit around as their new identity.

I personally never understood the points system in place of any monetary system from a user perspective. One may argue that a points system protects against inflation, but it doesn’t necessarily, since the seller can just inflate the point cost of a product. On top of that, the points-to-cash conversion — usually in any system that forces that — is confusing, as the conversion rates rarely make any kind of sense. Currently on Gamestop’s website, 1600 points costs twenty bucks, whereas 4,000 points costs fifty bucks. From the seller’s perspective, though, a points system allows the seller to sell point packages with totals that don’t even divide by the point cost of products, thus making users spend more money on points than they may actually want. So, it’s nice to see a report saying Microsoft will be moving away from this system in place of a standard monetary one.

(via Inside Mobile Apps)

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  • http://www.facebook.com/michael.hails Mike Pants

    Didn’t this start already? I swear I saw some games for sale for $19.95 over the weekend.

  • http://www.play-this.org/ Elliot S Volkman

    Actually they were supposed to start doing this about a year and a half ago. Looks like they are finally just catching up. Some of the bigger games were always listed as just a dollar amount, but the smaller games, movies, etc. will now be affected.

  • Baboonez

    Umm, that conversion rate is entirely consistent.

  • http://twitter.com/wkerslake Will Kerslake

    The advantage of points is that it makes the price of a game static, so a title can advertise that it costs 400 points in all territories. The currency conversion was done at the point purchasing stage. Now you’ll have a different displayed price in each region. 

    The current situation on XBL is a bit confusing because Arcade and Indie games are sold with points while Games on Demand are sold by price. So the current system is a mix.

  • Anonymous

    I always assumed the reason they did points was to make impulse buying more likely, which was also why they picked an arbitrary conversion rate. It’s not $5, it’s 400 POINTS, right? Why, that only seems like 4 bucks to me!

  • http://twitter.com/Samuel_Bun Samuel_Bun

    Points are not money to kids, not that money is money to kids.


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