What Are Microsoft Points?

And what can you do with them?

Black Xbox 360 on its side

Microsoft 

Microsoft Points were introduced in 2005 as a digital currency Xbox owners could use to buy digital video games, downloadable content, and more from the Xbox Live Marketplace. They were phased out in mid-2013, and all transactions on Xbox Live are now conducted in normal currency values. If you still have Microsoft Points cards, they automatically convert to the equivalent dollar value in your account when you use them.

You can buy Xbox Gift Cards at retailers instead of MS Point Cards, and you can buy Digital Gift Cards online.

What Were Microsoft Points?

Some downloads on the Xbox Live Marketplace are free, but a lot of premium content requires payment. Until 2013, Microsoft Points represented a digital credit purchased either with a credit card on your Xbox 360 or at retail locations. The value was 80 Microsoft Points equaled $1. So, for example, a 400-point arcade game set you back $5 in real money. You could buy points in increments of 400. It wasn't the greatest exchange rate, but it made transactions in the Xbox Live Marketplace relatively painless.

The Problem With Microsoft Points

The biggest issue with Microsoft Points was that users often had to purchase more credit than they needed. Originally, Points were only purchased in the amounts of 1600 points ($20) and 4000 points ($50). Even when the company changed the minimum to $5, many purchases were still only 79 points or the equivalent of 99 cents. 

Also, many users found the whole point-to-dollar conversion confusing. Both criticisms went away with the introduction of Xbox Digital Gift Cards. 

Microsoft Points Is Replaced by Xbox Gift Cards

Despite the fact MS Points are now gone, buying Xbox Gift Cards at retailers or the Xbox Digital Gift Cards online and using them to make purchases is strongly recommend over putting a credit card number on your Xbox 360 or Xbox One. You can buy Xbox Digital Gift Cards online in denominations as low as $1 and in $1 increments up to $100, which makes them good gift ideas. The retail cards begin at $5. Using gift cards rather than a credit card protects your financial and personal information.

Xbox Gift Cards can be used on the Xbox One, Xbox One S, Xbox One X, Xbox 360, Windows, and the Microsoft Store online. You can use them to buy games, map packs, music, movies, and TV shows, controllers, headsets, and other devices.

Because your Xbox Live account is the same for both Xbox 360 and Xbox One, any credit in your account can be used on either system.