With the launch of the Xbox 360 and the new Xbox LIVE in 2005, Microsoft created a new form of currency for use on their online services, Microsoft Points. Their reasons for it are quite reasonable. With the Xbox 360 (and later with the Zune) they were creating an online store and wanted to be able to announce the release of a product and one single price. So if you’re in Europe, Geometry Wars was 400 points. In the US, it’s 400 points. In Australia it’s 400 points.
However, what makes this different from other systems (including Nintendo’s Wii Points) is that points are not 1:1 to any real currency. In the United States, 80 points is a dollar. However, in Great Brittain, 80 points is 68 pence. Now, I was thinking that maybe that was the same sort of value conversion, meaning 68 pence is worth a US dollar. That is not the case, though it is pretty close. According to XE.com, 1 dollar is equivalent to about 61 pence. What makes this lack of relationship to real-world money is that after a while, products on Microsoft’s online services lose their real-world value. People stop thinking of a game coming out for 1200 points as coming out for $15 but just as their point value. Eventually, this could lead to Microsoft being able to sell products for very high prices because “they’re just points.”
A feature of Microsoft Points that is not nefarious is its relationship with Gamertags. Gamertags are associated with your Microsoft Passport, which are associated with many different Microsoft services; the two most prevalent services being Xbox LIVE and Zune. Due to only being able to purchase points in bundles, you are guaranteed to have leftover points. Points you use on Xbox LIVE can also be used on the Zune Marketplace. So if you bought a bunch of songs for Rock Band, but have 79 to 99 points left, you can buy a song on Zune, making the points incredibly useful to users, like myself, who are entirely entrenched in the Microsoft ecosystem of services.
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