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Why We Love . . . Microsoft Points

Author:
Matt Gardner
Category:
Features
Tags:
Microsoft, Microsoft Points, Virtual currency, Windows Phone 7, Xbox Live

Why We Love . . . Microsoft Points

A bit of a special Why We Love today, in which we take a peek at the recent rumour surrounding Microsoft's alleged abandoning of the Points scheme in favour of "real" currency, and what such a move could entail.

Rumours have been flying around over the past week or two suggesting that Microsoft Points - the currency currently used to purchase or rent content across Xbox LIVE, Zune Marketplace and Windows Phone 7 - will soon be canned in favour of actual "real" money. For many this will be a joyous relief, and event worthy of celebration as an outdated and potentially confusing model is jettisoned in favour of a simple marketplace that everyone can understand.

Crucially, it will bring Microsoft more in line with its competitors on the mobile gaming battlefield, where transactions are very much one-to-one: you always know where you are with your purchases. In an industry where the lines between gamers and non-gamers, hard core and casual, are becoming every more blurry, such transparency is vitally important.

Why We Love . . . Microsoft Points

It's important to note that this is still a rumour, and nothing concrete has been announced by Microsoft as yet, but it does seem to make sense, although it's important to break it down. Hacked accounts and leaked credit card information must be at the top of the list, with a more direct system arguably meaning that financial information is a bit more visible. But there'll be no reason for Microsoft to phase out prepaid cards along with the points. It's likely that the system itself won't change too much, just the currency. PSN and iTunes allow for account top-ups and gift cards, with the latter also providing the opportunity for instant transactions. It's that immediacy which will be key.

Microsoft Points have long been a prickly issue for gamers. The seemingly arbitrary nature of the whole setup has resulted in a currency that's simply bred confusion, where its value changes according to region and retailer and its efficacy is suspect, considering one constantly has small handfuls leftover after any transaction.

But then again, Microsoft's system is hardly alone in all of these things and, if anything, at least the system is relatively honest about it.

Why We Love . . . Microsoft Points

There have been a number of complaints this week about the leftover Points that languish in accounts after consumers have bought what they want in denominations of ten, twenty, thirty, sixty. With the minimum top up amount standing at 500 Microsoft Points, it allows the company to take your cash, and have it sit there collecting interest immediately, regardless of your own purchasing decisions. But that's no different really to the Wii's eShop or the PSN's "Wallet", which forces you to top up a fiver any time the object of your desire exceeds the amount you have left in your virtual pocket.

The introduction of Xbox LIVE Indie Games has meant that Points under 400 tend to get spent, these days, though. Impulse purchasing indie games has become a regular thing thanks to the reduced prices in that corner of LIVE's service. Yes, there's still sometimes a small smattering of Points left over, but as pointed out, that's no different to any of the other console marketplaces.

Personally, I always found manipulating the micro-economy of Microsoft Points to save money and suit my purposes easier than doing so on PSN, with its seemingly higher prices. It might have been familiarity (I bought an Xbox 360 first), but the swift equation of 80 Microsoft Points = $1 = 69p (using a flat iTunes exchange rate) means that there's an accepted median level of value to be undercut. Microsoft themselves provide the base level of currency exchange, and you learn quickly never to buy Points direct simply because you can get more for your money elsewhere. Any time you buy a 2100 Microsoft Points card for under £17, you're mathematically winning, even if they were overcharged to begin with. The Marketplace vs Retail relationship when it comes to PSN credit is a little more complicated, but perhaps more rewarding for hoarders. On the PSN itself, £20=£20. Sony's Store, however, is stocking prepaid cards for £17.

Why We Love . . . Microsoft Points

So, after establishing that Xbox LIVE and the PSN are really pretty much one and the same in this regard, the real question is what exactly is the point of changing to real currency if Points have served well so far? If you can still vary the value of the currency itself, what's the point of changing something that's worked well for years and made Microsoft a lot of money? To appear more transparent without actually changing a huge deal may well be part of it, but that would only bring the service in line with the PSN, and this looks to be a rumour more geared towards the impatience of mobile services.

The answer to that would appear to be immediate transaction such as those iTunes offers: giving the consumer the choice between a clean, swift transaction and hoarding credit up for later use. It's here that one would hope the pricing becomes more flexible, with buyers encouraged to horde for the future through price plans that discount by bulk, this is where the PSN deserves some applause. I'm frankly amazed that Microsoft still don't offer this on Xbox LIVE itself, with the standardised prices set by the company proving to be simple multiples rather than knocking a quid off at 2100 and perhaps a couple more at 4200 to encourage people to spend more.

The kicker will be pricing. Will a 400 MSP game be less than £3.45 as it should be? Will an 800 MSP title go for more than £6.90? How will the prepaid cards be priced? Will there be incentives for account holders wishing to stock up? Microsoft Points aren't perfect by a long shot, but change is only going to happen if its profitable. A unified approach is desirable and it could usher in some excellent integration and crossover between the mobile and console marketplaces, but hopefully the price for a more flexible and transparent virtual currency won't be inflated value.

Add a comment7 comments
hurrakan  Jan. 30, 2012 at 09:54

Points are bad.

When you buy Microsoft points, your real cash is in Microsoft's bank account, earning THEM interest. It's better if my cash stays in MY account, earning ME interest.

MattGardner  Jan. 30, 2012 at 11:19

Points are bad.

When you buy Microsoft points, your real cash is in Microsoft's bank account, earning THEM interest. It's better if my cash stays in MY account, earning ME interest.



But that's the case with all of the current console marketplaces - iOS and Android withstanding.

If a change comes I reckon it'll primarily be because (particularly with regard to the mobile platforms) Microsoft will want to introduce instant transactions. It makes no sense to have those happen in terms of Microsoft Points. However, they would be foolish to ditch the opportunity for hoarding bonuses. Prepaid cards work for both parties for different reasons. One just hopes that the exchange rate and the pricing works out fairly.

hurrakan  Jan. 30, 2012 at 11:28

But that's the case with all of the current console marketplaces - iOS and Android withstanding.

So?

What I said is still true.

JonLester  Jan. 30, 2012 at 11:38

I'd argue that you'd earn less interest on £6.80 than you would save on buying a discounted points card? Depends on the quantity you hoard and where you get them, I suppose.

Late  Jan. 30, 2012 at 12:16

I'd argue that you'd earn less interest on £6.80 than you would save on buying a discounted points card? Depends on the quantity you hoard and where you get them, I suppose.

Absolutely. Buying points cards when the prices are low can mean getting £17.85 of credit (microsoft's current price for 2100 points) for around £13 or £14. Even on a bad day you can usually get them for £15.

For example, let's say you spend around 500 points a month on dlc. To pay for that over the next four months:
If points cards didn't exist - keep your cash in the bank, and pay £4.25 for each of those four downloads.
While points cards do exist - buy 2100 msp for around £14. You've saved yourself £3, and you'll even have 100 points spare. Doesn't really matter that you're missing out on around 20p in interest (that's being extremely generous).

hurrakan  Jan. 30, 2012 at 12:54

There are simpler and more transparent ways of saving money.

Points obfuscates the real value. I prefer to have my money earning me as much as possible until I decide spend it.

The disadvantages of a points based currency system FAR outweigh the single advantage of using "points cards".

I seriously cannot believe anyone would defend Microsoft Points. Do you work for Microsoft?

Late  Jan. 30, 2012 at 13:16

The system isn't perfect. As you say, it does confuse some people. But as someone who doesn't fall into that minority my priority is to keep costs down, even if it means occasionally having to furrow my brow or even crack out a calculator.

The disadvantages of a points based currency system FAR outweigh the single advantage of using "points cards".

Main disadvantage - for those who are weak at maths it's slightly confusing.
Main advantage - it's approximately 15% cheaper (depending on when/where you buy it).
Not sure how the disadvantages FAR outweigh the advantages. (Yes, that's got an "s" on the end, there.)

I prefer to have my money earning me as much as possible until I decide spend it.
Earning pennies is nice. Saving pounds is better.

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