Microsoft Finally Getting Rid of Microsoft Points

[Griking]

oh....
you mean like oh i don't know........ a arcade where you exchange a quarter for a token to use the game machines... which is what the xbox service is named after?


yes of course that sounds completely redundant and absurd... who would ever do such a thing?

or the newer setup arcades which use a card service that you purchase a card that will contain points that you use to play games with. You can also load more credits onto the same card thus eliminating the need to carry 10 pounds of tokens around the arcade!

Well to be fair, arcades did this to reduce the motivation for people to break into their games for the money inside. Microsoft doesn't have to worry about this.

[skaar]

The points system was an attempt to introduce a standard global currency. Points cost different amounts in different countries yet the titles had fixed prices. Try to think outside the US, people.

Five (?) years later currency values have shifted but the buy rate is the same. This is why it costs more for me to buy the same XBLA title than someone in the US.", despite dollar parity.

I would be glad to see them shift to a currency model, but I will believe it when I see it.

[Rob2600]

Dwight: Don't you want to earn Schrute bucks?
Stanley: No. In fact, I'll give you a billion Stanley nickels if you never talk to me again.
Dwight: What's the ratio of Stanley nickels to Schrute bucks?
Stanley: The same as the ratio of unicorns to leprechauns.

[Leo_A]

The points system was an attempt to introduce a standard global currency. Points cost different amounts in different countries yet the titles had fixed prices. Try to think outside the US, people.

And the benefit is...?

I suspect the true reasons have already been noted. It was created by people familiar with consumer behavior that recognized that something like 1600 MS Points to the average consumer is going to feel cheaper than if it was labeled the actual amount of $20, increasing the likelyhood of a purchase.

And for credit card users, it justified the entire points system. They'd have a harder time explaining why you can only buy certain incremental values of MS's virtual dollars when the game prices are in dollar figures. Going to a points system helped reduce criticism that you couldn't do something like charge the exact amount you needed to a credit card for a specific purchase. Thus, the typical consumer will almost always have some extra points sitting idle while MS pockets it before the consumer ever uses it to make a purchase.

I think my Wii shop account has had a dollar or two unused on it since day 1 (Thanks I imagine to a few import purchases with strange values like 900 Points that have kept my account from ever completely emptying out). That's a real benefit to a company when you have millions of consumers that have purchased money that is sitting idle since they had a small amount left over after making purchases that wasn't of much use by itself. Go to a system where your purchases are in dollar amounts makes it all the harder for a company like MS to justify that situation to consumers, where as when they're virtual points, I don't think many people object.

If you can make millions of consumers pay today for something they won't need until tomorrow, that's to their benefit. MS no doubt always has several million dollars in the bank associated with unspent MS Points.

[TonyTheTiger]

You can get that same benefit, though, without people lashing out at the inherent unfairness (as much), by offering more bang for your buck at higher denominations.

It all of a sudden starts making a whole lot of sense when what would otherwise be $50 worth of points if bought at low level increments costs only $40, or even $45, when bought in bulk. While the end result is the same, you have left over money tied up in the system, the discount on the dollar to point ratio makes it feel less shady since the point system justifies itself with the pricing scheme as opposed to coming off as solely there just for the sake of having unspendable points left over per transaction. I'd actually probably prefer that to a straight 1:1, everything priced in legal tender, system (which can still tie up money in your account if things can't be bought on a per-item basis). And it could potentially work to MS's benefit, too, thanks to the human tendency to buy more when you get more.

There are potential niceties to a point system. It just so happens Microsoft and Nintendo haven't employed them.

[goatdan]

Well to be fair, arcades did this to reduce the motivation for people to break into their games for the money inside. Microsoft doesn't have to worry about this.

Uhm, no?

Arcades did this for two reasons:

Reason 1 is what people mentioned -- you put in your money, you get X number of tokens, you can't spend them anywhere but there.

Reason 2 is that they could do deals for larger amounts of tokens. Stuff like 4 for a dollar, 24 for $5 (4 free), 50 for $10 (10 free) and so on was / is common. And guess what -- you don't spend all those tokens because it takes too long to play the games or you run out of things you want to play, and you have a physical reminder of how you need to go back to the arcade to spend them.

Remember -- there was still a machine to convert cash bills into tokens, and what would it be easier to make off with -- a wad of bills that could easily total a couple thousand bucks from one single machine, or tons of quarters from a machine that probably only has a couple hundred it it at most.