AJ Papa’s Blog

This week Garnett Lee of 1UP Yours fame had a chance to speak with Aaron Greenberg, Microsoft’s Group Product Manager for Xbox 360 and Xbox Live, on EGM Live. The interview particularly impressed me as Garnett didn’t have any reservations asking Aaron about the things that irk him about the Xbox Live service and Xbox 360 platform — annoyances that are not only specific to Garnett but shared by the majority of the Xbox Live user base, me included. Aaron spoke about, of all things, the red ring of death fiasco, the confusion between the differences of hardware configurations, and even about the the lack of bigger and ambitious digitally distributed games. All these issues are, indeed, pressing, and it’s great to hear the perspective of a Microsoft insider; however the issue that bothers me the most that Aaron had a chance to discuss in the interview is the issue of Microsoft points as currency for its Xbox Live Marketplace service — more specifically what bothers me are his justifications for the points system.

Here is a quick primer for those of you who are unfamiliar with Microsoft points. Xbox Live Marketplace allows consumers to purchase movies, TV episodes, and downloadable content for video games. The currency in this virtual marketplace is Microsoft Points which can be purchased in batches. At first glance it doesn’t seem like a problem; virtual money for a virtual marketplace right? You don’t know how annoying it can be when purchasing something with a price that isn’t exactly aligned with the set purchasable pre-paid amount batches. If I wanted to purchase, let’s say, a picture pack for 50 Microsoft Points, I’d be force to purchase, assuming my virtual wallet is empty, the lowest batch amount which is 500 points; I can’t just purchase 50 Microsoft points. What’s even more annoying is the conversion rate of points to USD. As alluded to by Garnett in the interview, it’s not exactly “apples to apples” as 80 Microsoft Points equals 1 USD. If something were to be priced at $6.25, then a logical listing on the marketplace service should be something like 625 Microsoft Points. Unfortunately it’s not; Instead it’s listed as 500 Microsoft Points. It’s quite confusing, and some say it’s even a bit misleading.

In the interview, Aaron went on to defend the points system by giving some fairly convincing arguments. He states some of the major reasons why Microsoft uses a point system for their digital marketplace:

It’s mainly due to credit card transaction fees. What we didn’t want to do is burden the consumer with that cost. [It's so the consumer is] able buy in buckets and be able to do micro transactions … And the second reason is we’re enabling people to buy these cards at retail who don’t have credit cards.

What Aaron said does make a bit of sense from a business stand point. But why is it that Sony, a company that is also in the digital marketplace space, can price its products on the Playstation Network with real world currency and even offer similar pre-paid cards via Playstation Network Cards? I suppose, if I had to guess, Sony is more interested in the ease of use and understandability in its system from the start of the user’s first experience. I supose it’s also due to the fact that Sony isn’t micro-transactioning me for gamer pics, themes, and jersey’s for Madden.

If you ask me, using a real world currency system legitimizes the idea of a digital marketplace even further — and not just a digital marketplace either, any marketplace for that fact. Aaron is onboard with the idea of digital distribution when he stated that “digital distribution is the future.” If digital marketplaces are indeed destined to become more prevalent, are consumers in the future going to have to deal with all these different point systems for each marketplace? They shouldn’t. Why? It’s the same reason why we don’t have Wal-Mart dollars, Costco Bucks, or any separate currency for any other store for that matter. It’s the same reason why whether I go to Amazon or iTunes to purchase music that I pay with dollars. We created a standard to make it easier. Why shouldn’t it apply to marketplaces in the digital space?

One point of view that Aaron statted in the interview that really raised my brow is how he felt the points system has the added benefit of having a consistent price all around the world. He goes on to say, “There are some benefits to messaging someone anywhere around the world that reads about Poker Smash [being priced at] 400 points. They all know what that means.” As gamers and consumers, do we really want our video game purchasing to be homoginized? Is it really that beneficial? I don’t excitingly call my fictional cousin in Japan because both of our games are consistently priced. In fact, almost every consumer in the world already understands that things are going to be priced differently in different regions due to simple nature of economics. For example, I know the cost of living in Hawaii is generally expensive because many of its goods are imported. To me, by consistently pricing products, it seems more like a facade that hides its true local monetary price and value.

Of course what Garnett failed to bring up, and what Aaron failed to discuss, is the point system is a bit psychological in nature — though the psychology of the system is irregardless to the inconveniences. Some believe that after the initial purchase of Microsoft Points, consumers, gamers in particular who are all too familiar with the concept of points, are more inclined to spend their points. Because they are, in a sense, just points right?

I invite people to actually listen to the segment on EGM Live. It really adds some perspective. But from what I’ve written is clear that I have a certain disdain for the Microsoft Points system. It’s not just Microsoft too; I speak about similar points system as with Nintendo and it’s Wii Points sytem. People and companies alike, please just ditch the points system!

This entry was posted on Wednesday, April 2nd, 2008 at 2:48 am and is filed under Gaming. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.