Microsoft Points, now Xbox Gift Cards

 As of August 22, 2013, Microsoft Points have been retired and replaced by local currencies. All Xbox Game Store purchases will now require credit on your Microsoft account, or you'll need to use a debit/credit card instead.

To make things easier for customers, Microsoft decided to utilize actual local currencies rather than Microsoft Points.

If you buy a present card or redeem one, then make a purchase on the Marketplace but don't spend all of the money, any remaining funds will be kept on your account to help you make your next purchase.

Until further notice, Microsoft Points prepaid cards are still redeemable on Xbox consoles and xbox.com. Your account's total Microsoft Points will be converted into your local currency.

The Microsoft Points currency was used on the Xbox Live Marketplace, Games for Windows, Windows Live Gallery, and Zune online shops. Users could use points to buy items without having to provide credit card information, which saved them money on small credit card transaction fees that Microsoft would otherwise pay.

Some downloads on the Xbox Live Marketplace are free, whereas most other downloads, such as full versions of games, arcade games, indie games, and downloadable content for certain titles (including some popular EA Sports titles), used to cost Microsoft Points.

Point cost per region

In each country, Microsoft Points were sold in the local currency. However, because each country's official price per point is defined differently (relative to the local currency), some areas pay more (in terms of cost relative to the US dollar) for the same quantity of points than others due to currency fluctuations.

Unlike the Xbox 360, Microsoft Points were not sold in retail locations. Instead, they may be obtained via credit card or as Microsoft Points Cards (also known as "tokens") from stores. Customers can purchase points in a variety of quantities ranging from 100 to 5,000 Microsoft Points. In the United States, 80 points are worth about US$1. As a result, an 800 point arcade game would cost around US$10 in real money.

Microsoft Points have been discontinued, so the prepaid cards have been phased out. Xbox Gift Cards have taken their place.

Criticisms

In recent years, the Microsoft Points system has been lambasted for being deceptive in terms of real-world cost, as well as for users frequently having to buy more points at once than are required.

In his evaluation of the Zune, Windows IT Pro Magazine's news editor Paul Thurrott writes:

Microsoft is attempting to conceal the true cost of this material. A song on Zune costs roughly 99 cents, according to Microsoft. However, it appears to be less because it's only 79 Points.