Enahs wrote on Jan 24, 2012, 11:16:
I am not sure they should change it. It was a smart financial decision for them to do that, ignoring anybody that might avoid the system because of the points. And it is now an even better financial decision with the changes and fees in the banking system.
Lets explain why.
Every transaction that is made via a CC or debit card, the bank(s) charage a fee. Lets pretend it is just 10 cents. So, if Microsoft were to charge $1 for a song, they lose 10% of the revenue from that purchase. Do that millions of times a day/week/etc, it adds up quickly.
Now, lets say you buy $10 worth of 'points', the banking fee is per transaction. Microsoft has now only lost 1% of revenue on that same transaction.
As you can imagine, this can QUICKLY add up to millions of dollars lost if you are doing a lot of business.
With the recent dramatic increases in fees for CC/Debit card transactions; this points system is even a bigger savings boom. Why throw it away now?
That's why they initially did it (that and cheating the tax man). They are changing it because the savings pale in comparison to the size of the market they're trying to attract, most of whom do business with real dollars and do not want to deal in point systems. Most consumers think of points systems as a value added benefit for making transactions, not as the currency of transacting itself.
They don't have the kind of uptake it requires to do this outside of a videogame market, you need Facebook levels of user commitment to do that. There's also the business side of things where they would not deal with this in any form and Microsoft has ambitions there with its phones and tablets.
Playing: Xenoblade Chronicles DE, Ys IX, God of War
Watching: Lupin, You me and the Apocalypse, Days of Thunder