Microsoft Points phased out in favor of cash in Windows 8
Is this the end of Microsoft's controversial virtual currency? — Microsoft has started to remove its Points payments system as the default way to pay for music downloads and movie rentals or purchases in Windows 8.
Context & Ripple Effects
The move confirms what an Inside Mobile Apps exclusive reported back in January: Microsoft's Points system is being wound down, and Windows 8's media store is the first place it shows. Instead of buying blocks of points to spend on music downloads and movie rentals or purchases, users will pay in local currency directly.
It fits the broader cleanup ahead of the October 25-26 Windows 8 and Surface launches — Microsoft has already been retiring legacy consumer brands like Zune and Windows Live in the new OS (per The Verge's February report), and Points, a holdover from the Xbox-era wallet model, was the obvious next candidate. The story traveled widely, picked up by CNET, Engadget, Gizmodo, Joystiq and others on the same day.
First-order effects
- Windows 8 buyers of music and video get straightforward cash pricing — no leftover point balances, no conversion math, and no breakage accruing to Microsoft on unspent media credits.
- Microsoft Points survives only in the Xbox ecosystem for now, making the gaming storefront the last major surface where the virtual currency remains the default.
Second-order effects
- Pricing in real dollars exposes media prices to direct comparison against iTunes and other cash-priced stores, removing the psychological buffer that obscured per-item costs.
- If the currency model works in Windows 8's store, the pressure shifts onto Xbox's own marketplace to justify keeping a separate currency — developers and publishers there face two accounting systems for one company's platforms.
Third-order effects
- Virtual currencies are becoming a liability rather than a lock-in tool: as app stores standardize on local-currency billing and gift cards, closed wallets increasingly read as friction regulators and consumers both question.
- For Microsoft specifically, the pattern is consistent brand and commerce consolidation — MS Money, Zune, Windows Live, and now Points all folded into fewer, simpler surfaces — pointing toward a single unified store account across Windows and Xbox if the trajectory holds.
The trend: Platform holders are abandoning proprietary virtual currencies in favor of direct local-currency billing, with Microsoft's media stores leading its own retreat from the Points wallet.