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Rumor: Microsoft doing away with Microsoft Points system

Microsoft Points rumor

Here’s a rumor that many gamers probably hope will come true: Microsoft may be doing away with the Microsoft Points virtual currency system. According to Inside Mobile Apps, who cites an inside source, the change will take place by the end of the year.

Microsoft Points have been around since the Xbox 360 launched in 2005. MS Points were originally used to buy Xbox Live Arcade games and downloadable content for Xbox 360 games, though their use has expanded to include purchases for Games for Windows Live (PC), Zune media, and DLC for a handful of Windows Phone games (Beards & Beaks, Gravity Guy, and Bug Village). 400 Microsoft Points equals five US dollars, though the exchange rate varies in other regions.

A sizable number of people dislike Microsoft Points for a few reasons. Firstly, they introduce a needless conversion mechanic to online purchases. While I’ve never found the dollar-to-points ratio the slightest bit confusing, apparently it does cause the gears of some people’s minds to spark in an unpleasant fashion. Other major online content providers – namely iTunes and Sony’s Playstation Network – simply use actual currency, so Microsoft’s reliance on its own format appears as a weakness by comparison.

Secondly, it has historically been a challenge to buy the exact amount of Microsoft Points one actually needs. Originally, Points could only be purchased in increments of 1600 ($20) or 4000 ($50), with no discount applied for picking the larger volume. Eventually Microsoft started allowing users to purchase quantities of as low as 400 Points directly through their website or the Xbox 360 console, alleviating the issue to some extent. But even now, many pieces of content cost odd amounts like 480 Points ($6), and you can’t buy that exact number of Points.

On the other hand, I’ve long been a proponent of bringing MS Point purchases to Windows Phone. For gamers like me who support both the Xbox 360 and Windows Phone, sharing a balance across platforms would be very useful. After all, Xbox Live accounts, GamerScore, and Avatars already transfer seamlessly.

MS Points have a couple of other advantages too. I can buy an MS Points card without paying tax and any purchases I make with it won’t be taxed. But whenever I buy a Windows Phone game with real money, it’s always taxed, so purchases of equivalent price actually cost people like me more on WP7. On top of that, Amazon and other retailers frequently offer discounts on Points cards, so savvy shoppers need never pay retail price on their Xbox Live purchases.

Getting back to the rumor, it promises that all Microsoft platforms currently using MS Points will switch to the standard currency of each user’s country. People’s MS Point balances would simply convert to dollar amounts as well, so there’s no danger of losing money already spent. Taxes could start applying to all purchases (depending on your location) though, which would sting. Fears  of Points cards disappearing from retail, forcing gamers to make purchases with credit cards or PayPal, are unfounded. Microsoft would almost certainly retain cards at retail – they’d just be for dollar amounts instead of points.

The currency switch is just a rumor for now, and nobody’s going to extract the truth of the matter from Microsoft. We’ve reached out to a few developers though (as they’ve supposedly been informed of the impending change), and will report back if anything turns up.

Source: Inside Mobile Apps via Kotaku

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Comments

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WinFan1 says:

im gonna change my comment cuz that was kinda harsh i dont like ms points simply because im lazy and they are not exact :P

cool8man says:

I bought a ton of $50 points cards from BUY for $35 so everything on XBL is super cheap for me. It's a much better system than Windows Phone where I always have to pay the same amount as everyone else and I get taxed too. People who complain about points are just too lazy to do a simple conversion.

WinFan1 says:

Hence me saying "im LAZY" what was the point of that comment dude? no where did i say i wasnt you should really have read my one sentence comment...

Strangis says:

The one thing I'll miss about points is what you mention in the article.  It's often possible to find MS Points discounted.  As someone who plays a lot of indie and arcade games, and makes use of the Zune services on the 360, it was a nice perk.

cool8man says:

The discounted point cards are not going to go away. Point cards are some of the biggest money makers in the industry today. They can still discount the cards even if they are in dollar amounts. Oh and you may still have to buy more dollars than you need for a game. Getting rid of points doesn't mean you'll be able to pay for items in exact change. It may still require you to purchase a minimum $5 balance first to keep their credit card transactions low. Remember a retailer has to pay a fee every time they run a credit card so the incentive is to minimize the number of transactions.

SmoothDog says:

Dang. Now the MS points calculator is worthless that I installed. Never actually liked having to calculate those points to $ anyways. Good riddance MS points!

bgravesen says:

I hope this happens. I never had a problem with MS Points, but there have been times I just want to spend 160pts ($2) on an item but end up having to buy a point pack of 400pts ($5). So it would be nice to just pay for things outright instead of having to get packs of points.

Vallos says:

This is my one and only gripe with MS points.

tylerh1701 says:

This isn't going to solve that.  PSN's minimum funding is $5, I believe Wii's is too. 
 
So even if you want something that costs $2, they can (and will) make you fund at least $5 from your card.

Popple3 says:

Not necessarily. If there were the case, then we would be facing the same issue with Windows Phone. Obviously Microsoft have a set up for Windows Phone that allows micro-transactions of 99c, which they could use for a new Xbox 360 payment system.

tylerh1701 says:

That's true, they COULD do it.  But I think the reason you can fund less than $5 on WP is because large amount of the games are $3, and tons of non-game apps for $1, $2, etc..  There's nothing (gamewise) on XBLA less than $5, just dinky themes, pics, and avatar clothing.

TboWP7 says:

I hope they are gonna use cards with € in Europe that I can use too buy things from the Marketplace.

MastrMeatWad says:

It makes sense.  Make it universal for Xbox 360 and WP7 purchases.  It is silly to have to use MS points on my console but use my Credit C on my phone.  If they turn the point cards to $ amount cards like sony and you can use them for both the console, apps, and wp7 then I am happy.  This way I can buy a 20 dollar card at a discount and use it on system and phone. Win/win. hehe

Ordeith says:

Points allowed MS to price the marketplace consistently worldwide. The currency conversions were handled at the time of points purchase. It greatly simplified things for MS.

Curtieson says:

Points were originally put in place so they could charge fractions of a dollar for items...something that was not possible with credit card minimums in 2005.  BUT, the companies ended up charging 80 pts minumum anyway so that defeated that whole purpose, haha

This. I don't have a credit card.

Chris Coyle says:

Die MS points die!

mattpga says:

I hope its true. Annoying to have to try and work out exactly how much you have to pay to rent a film on zune, and then to have to pay more than double just to buy a chunk of points. If you can just pay for what you want and not have to do the math (a point is worth 85p), all the better. But then i dont need points to buy a zune pass or for music. just get rid of it. its pointless. pun intended.

glenc says:

Points or $$$ is moot but $$$ is probably easier.
Windows 8 seems to be the converging timeline. Like xbox, W8 and WP7 both need "prepaid" cards/points for minors and those without credit cards. Right now it's absurd you can't buy WP7 app/game credits (dollars or points).
Then "windows/xbox market" cards can be purchased in games stores, supermarkets, etc. bolstering the ecosystem of xbox, windows 8 and windows phone.
 

PhilR8 says:

The Points system has been sneaky and dishonest from the beginning, and I'm glad to see it go.  Seems like a blatant attempt to confuse the actual price of content.
"Games on Demand" games are already priced in dollars.  Time to make it universal for all content.

Hampus says:

I just play on my gaming PC. I used to play on the Xbox 360 but I couldn't stand the graphics:-P.

Justin.TV312 says:

Xbox 360 has better graphics than the Wii,PS3 and some graphics cards

Tahiti Bob says:

I'm a 360 fanboy but good luck finding better graphics than Uncharted 3 on Xbox. Do you work for Microsoft? You always defend them even when it doesn't make any sense.

Justin.TV312 says:

Uncharted 3 is probably the only example. Rest of the PS3 games look like shit with muddy textures

Justin.TV312 says:

Uncharted 3 is probably the only example. Rest of the PS3 games look like shit with muddy textures

Solidstate89 says:

Thank God. I've always hated the use of points.

DavidinCT says:

If your going to have a standard, then have a standard. Windows Phone 7 broke the mold of a standard (should of had $$ or MS points to get apps/games). Now that WP7 does not take it and everyone else offers cash options, it's like MS to go with the flow....
Yea, I guess it would be easier in the long run. On the Xbox 360, Instead of looking at 850 points for a game, I could just see it's a little over $10. I think I would prefer that myself in the long run.
I always wondered why MS went to a MS$ system, but, then it's like of like your bank, holding your cash till you need it.

RayWP7 says:

Proprietary currency to actual real money systems exist in a lot of microtransact scenarios. I work in game industry and its a clever way to make money especially when nothing you buy can be bought for currency packages if the exact amount. Also, people tend to lose track of how much theyre spending - its like hiding clocks or not providing windows in casinos. Still, personally, real money is better. I hope its true.

NaterBater says:

Am I the only one who doesn't have one problem with Microsoft points? How bout the games that come with free Microsoft points or the situations where Microsoft gives you free points? Were going to ultimately be paying more in the long run with taxes.

DavidinCT says:

Dont you pay tax when you buy the points ? Yea, maybe a few cents more in the long run but, you still are paying taxes.
Unless you buy online but, you should be paying taxes to your city/state but, that is for another discussion(its the law but, no one does it)

Paul Acevedo says:

Not every retailer charges taxes on MS Points cards. It's akin to charging tax on a gift card, which essentially taxes the customer twice instead of once.

iamoniwaban says:

So as a MS rewards member I will get currency credited to my account instead?

enahs555 says:

I am not sure they are going to change it. It was a smart financial decision for them to do that, ignoring anybody that might avoid the system because of the points. And it is now an even better financial decision with the changes and fees in the banking system.
 
Lets explain why.
 
Every transaction that is made via a CC or debit card, the bank(s) charage a fee. Lets pretend it is just 10 cents. So, if Microsoft were to charge $1 for a song, they lose 10% of the revenue from that purchase. Do that millions of times a day/week/etc, it adds up quickly.
 
Now, lets say you buy $10 worth of 'points', the banking fee is per transaction. Microsoft has now only lost 1% of revenue on that same transaction.
 
As you can imagine, this can QUICKLY add up to millions of dollars lost if you are doing a lot of business.
 
With the recent dramatic increases in fees for CC/Debit card transactions; this points system is even a bigger savings boom. Why throw it away now?
 

DavidinCT says:

Good points. Never mind taxes per transaction.
Then they should add it as a option for WP7 and I would be fine with it. (have a setting to show $$ or MS points, just have it default to $$).

Tahiti Bob says:

I love MS points as I always manage to find them below face value. This is less likely if there's a switch to real currency.

Justin.TV312 says:

There will still be prepaid cards

Tahiti Bob says:

Of course, I know that but they will never be discounted the way Microsoft Points are so at the end of the day I will pay more for my purchases.

Adorath says:

The Points are no problem. The problem is, that you can't purchase apps with them -.-

tylerh1701 says:

Man so much hatred towards points.  I love them, they've saved me TONS of money over the years.  Buy.com sales 4000 points cards ($50 worth) for $35 at times, I really don't see them doing that when it is just straight currency they're selling.
 
I love points and would hate to see them go.  Good thing I don't think this is true.
 
Also, nice article Paul.  Every damn article I've read about this has basically been a copy/paste from that Inside Mobile Apps site.  Thank you for providing your insights on it and not just copy/pasting.

WPSteve says:

We can complain as much as we like. But let's face it, Microsoft makes money this way. We're still going to pay for their services regardless.

mrdeezus says:

This is great news. It simplifies everything ms is trying to do.....they can still sell cards in 510&25 denominations like apple. Good job MS.

stevethenerd says:

I don't like make $2 purchase on my credit card... a prepaid currency makes more sense... whether it be points or dollars I would will like a prepaid system better.

Neb Okla says:

They're just afraid of what happened to Bernard VonNothaus happening to them. Thank God for Bitcoin.

I hope this happens! Sick of calculating dollars into points.

Recrem says:

I've always hated the ms points system, I don't make alot of purchases, so whenever I dl something always got to buy more points that I don't need, which sit there until I want to dl something else, which I won't have enough making me pay for more points, if they get rid of it, then I can only pay for what im going to use,

vamn says:

Unless you're still buying points directly from MS, I can't see why you would want points gone. Points mean cheaper games for me. Retail for a 4000 point card is $50, but it can usually be found for $35-40. (Deals for cash value iTunes and PSN cards are practically non-existant.) Plus, where I live points cards count as gift cards and don't get taxed. So when an Xbox game is 400 points, I actually end up paying between $3.50 and $4. Compare that to an app or games on WP7 that cost me FULL CASH PRICE PLUS TAX.
Why why why would anyone in their right mind consider points a bad thing????

PhilR8 says:

Because they're inherently dishonest and designed to make content seem cheaper than it actually is.  Why wouldn't they make 1 point = 1 cent?  Instead, 80 points = 1 dollar.  This is by design to make content seem cheaper than it actually is, especially when comparing across ecosystems.  "Oh, this show is only 250 points on Zune; it's $2.99 on Amazon!  Let's go ahead and get it on Zune."  But in reality, 250 points is $3.08.  The points deliberately confuse consumers to what the actual price is, regardless of what deals you can find on MS Points cards.  I want transparent pricing using actual currency.

CAVX says:

I could see that if points were only available in the US. As it is, they stand as a universal currency for the products you can purchase from them. I assume that their primary concern with the conversion of points to various currencies was the idea of making Microsoft Points an understandable currency to every region without bizarre rates. Perhaps this was a secondary motivator, I don't know, but I doubt it.

schlubadub says:

Because points cards aren't discounted outside the US. It's $16 for 1000 points via XBL or $25-26 for 1500 points retail. 5000 points is like $85 retail or $80 on XBL

rikkit says:

Points are fine. I wouldn't mind them if I could use them everywhere, say Windows Phone apps.

No tears will be shed for this awkward system, however it always made me rethink my decision to purchase. "What the hell am I going to buy with this leftover 220 Microsoft points."

Beezie84 says:

This is a bad idea.. Not everyone uses credit cards and use cash to buy points.. And for those that complain about buying 400 pts to purchase something that's 160 pts, there has been a change payment option for a while now where you can use your credit card for that $2 purchase.. MS pts are fine the way they are, I hope MS doesn't change a thing.

PhilR8 says:

You'll still be able to buy top-up cards in all the same places you already buy them.  This has nothing to do with if you use cash or credit to buy points.

Justin.TV312 says:

Someone can't read

Beezie84 says:

This is a bad idea.. Not everyone uses credit cards and use cash to buy points.. And for those that complain about buying 400 pts to purchase something that's 160 pts, there has been a change payment option for a while now where you can use your credit card for that $2 purchase.. MS pts are fine the way they are, I hope MS doesn't change a thing.

MediaCastleX says:

Not reading any other comments, I wish it weren't so...there was nothing wrong with this system. It kept the riff-raff away! U_U

schlubadub says:

Discounted points cards?! All of the retailers here (Australia) charge $1-2 more than you can buy direct from XBL. i.e. $25 for 1500 points. We also get screwed in the currency conversion when it's pretty close to 1:1. The full games are ridiculously priced - fallout 3 is STILL $100 for the non-GOTY!! I'd love to see the points go, but it won't stop us getting screwed

awesumjon says:

Sounds good to the ear, but MS makes more money simply by you buying their points. It works out great for them. Taking this with a lump of salt.

ben55124 says:

Micro payments need to be consistent on MS platforms.  Their goal should be consistent and getting the money to developers -- rather than credit card fees.
 

Jess82#WP says:

Thank God! MS points was the dumbest thing about Xbox live.

Quin 2013 says:

I would rather see WP pick up on me points rather then having to pay cash for every game/app I want to purchase.

I'm not sure where I stand on this issue but honestly, it wouldn't bother me one way or the other.

Bruno H says:

If you want to know what will happen to the points system you will not have to wait long. By end of February the windows 8 marketplace will go live. I can bet that the system you will se there will be where all other Microsoft purchase systems are going.

Sicarius123 says:

I have had a PS3 for 4-5 years and barely spent anything on PSN in real dollars as opposed to the Xbox I've had for a month.
 
The points definitely change your thought process behind spending which means more money spent through the store, which makes me really doubt Microsoft would get rid of it.
 
Either way the minimum wallet funding amount is what really annoys me, especially on the Playstation Network where you're funding real dollars, why can't I just buy the item in exact money on my credit card?

mkashman says:

I hope I can buy a Zune Video Pass, points or cash, who cares. Give me something where I can stream and download as much video from the Zune catalog as my Internet pipes will allow!

I could of swore that there was an article on wmexperts a few years back about Microsoft possibly getting rid of points due to regulatory issues/business ethics concerns. At the time, I wasn't a huge user of points but even then, I could theoretically see the value because of the discounts, taxes, and implications of switching to a credit card system. As another user mentioned, it does make sense that MS might be doing in anticipation of the Windows 8 marketplace. I also wonder if it would make the windows ecosystem more appealing to people who have never experienced the glee of buying deeply discounted MS points. On the other hand, I wonder how this will affect content pricing - will it increase to counter CC fees?