In my last post when I mentioned the XBL Marketplace buying experience I glossed over the Point currency system that Microsoft uses.
With the recent developments on the Zune front, Microsoft Points have suddenly become a much more relevant topic. According to CNET:
The new Microsoft cash system will work by adding money to an account, as with a prepaid phone card. Points will then be deducted from the account with each purchase. A single song will cost 79 points, “the equivalent of 99 cents,” according to Microsoft spokeswoman Kyrsa Dixon.
Fair enough. The article goes on to indicate that the Points will be universal, meaning Live users will be able to use their Points for music and vice versa, which is not a surprise; rather, that’s how it should be.
Well, that’s how it should be if Points are involved. The question is, why are they involved in the first place. According to Microsoft:
On the original Xbox Live, transactions had to be around five dollars U.S., the minimum for most credit cards. But with Microsoft Points, the price for most anythingâ€”maps, skins, levels, demos, and moreâ€”can be much lower than that. That’s a big deal. For example, say you want to get one of the new maps for your favorite shooter, but you’re not that interested in a few of the others. Lucky for you, Marketplace can offer each map individually for just a few points.
So Microsoft’s logic behind the Point system is to bypass the $5 credit card minimum. This sort of makes sense on the surface, but there’s one problem with telling people this: the iTunes Store. Enter your credit card information once and you can buy as little or as much as you want at any given time; no silly $5.00 limit.
After some discussion with a fellow gamer (AKA: my boss), we landed on the theory that it’s not that you can’t spend less than $5.00 on a card purchase; it’s that the retailer gets charged an amount if you do. So rather than a way to circumvent this $5.00 limit, the Points are a way to save Microsoft money.
Don’t get me wrong, at this point it’s still not that big of a deal. I don’t think most 360 owners are put off by Points, especially after you get an idea of the dollar/point conversion rate (as stated above, $1.00 is approximately 80 Points). Then again, I would venture that any 360 owner who uses Xbox Live probably has a decent amount of comfort with technology and downloading media as opposed to buying a physical copy.
I would also venture to guess that Microsoft’s intended market for the Zune is much broader; of course they want technophiles to buy it but they also want to appeal to the normal not so computer literate person; the one who assumes it will work with their machine because it says Microsoft and not Apple. If the goal is to get these people comfortable with buying media online, I think the Points are the biggest obstacle (aside from terrible hardware or software, but I’m giving MS the benefit of the doubt).
I’m not sure what the lowest amount of Points you can buy at a time is, but let’s say it’s 500. By today’s rate, that’s about $6.25. If a new Zune user wants to try the music store, they have to commit to $6.25 instead of $1.00 as they would in iTunes. Furthermore, I’m curious how unobtrusive it will be if you decide to add points; say, if you want to purchase a whole album but don’t have enough in your account, is it easy and fast to add more?
The final and potentially worst aspect of the Point system across the board is the exchange rate. I don’t know if anyone could tell you why Points don’t convert equally to cents, which makes it more complicated to figure out exactly how much something costs (rev up your calculators). Aside from it being just plain inconvenient, I think there’s a hint of deceptiveness about the whole system. It’s a rather conniving way of making everything appear less expensive than it actually is, and that’s not cool.
I’ll close with this. I think the Zune, because it’s not completely reliant on the music store for content, can survive in spite of the points if it’s a good piece of hardware. But if the music store itself dies, I think the Points will be the ones holding the knife.