Report: Microsoft to Discontinue Microsoft Points

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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