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Microsoft sued over MS Points

Queasy

Queasy

Moderator<br>Console Gaming
It has been a common complaint since the launch of the Xbox 360 and the addition of MS Points to Xbox Live - MS Points sold in batches that do not match up to the prices of content on Xbox Live. This has driven Philadelphia attorney Samuel Lassoff to file a class-action lawsuit against Microsoft claiming that Microsoft is engaging in a &#8220;scheme to unjustly enrich itself through their fraudulent handling&#8221; of his Xbox Live Account.

With the addition of traditional monetary pricing for Games on Demand and a quote from Xbox product manager Aaron Greenberg that the company might do away with the MS Point system, it can&#8217;t come soon enough for some Xbox 360 owners like Mr. Lassoff. Yet, at the same time, Microsoft recently announced the Xbox Game Room where users can purchase classic arcade games from the 70s and 80s using MS Points. If a change is coming, it is not right around the corner.


Lassoff believes that Microsoft has overcharged him and hundreds of other Xbox Live users by setting up a system that seemingly intentionally leaves MS Points left over in amounts that can&#8217;t be used without the purchase of additional MS Points. In his lawsuit, Lassoff claims that "Microsoft breached that contract by collecting revenues for digital goods and services which were not provided.&#8221;


Even if Microsoft does switch to real currency for online transactions, users may be left with unused MS Points unless Microsoft converts them to real currency as credit on their Xbox Live accounts.


(via Information Week)
 
If this works maybe they can take on Nintendo next. They have a similar system in place, though at least in their system 1 point = 1 cent.
 
I'm in the group of "I think MS Points are ridiculous." It doesn't matter what they're worth, the only way the system works is if you can spend them like money until you have NONE left. Like, it would take tap dancing on my part to spend my current amount of points...I think I have 1160? (800 + 160 from 1 vs 100 + 200 from an LG giveaway). I'd rather pay for something straight up than having to go with a bogus currency like MS points.
 
It's the old "Why do hot dogs come in packs of 10 but hot dog buns come in packs of 8 conundrum." They eventually figured it out. MS will too. Just not as soon as we'd like.
 
On the other hand, you can usually get really good deals on MS points a few times a year. This would cause the stuff you buy to actually be priced lower than if you were to buy it straight up with actual currency. By MS Points not being real currency, retailers can discount the cards periodically. There are pros and cons to both scenarios.
 
Considering, I have 430MS points and the Rock Band song bundle costs 440, I've sat at that number of points because I refuse to buy 500 to be left with another wasted number. They knew what they were doing when they priced and sold MS points. I think this law suit could help change this money grabbing scheme.
 
Krazy4Real said:
On the other hand, you can usually get really good deals on MS points a few times a year. This would cause the stuff you buy to actually be priced lower than if you were to buy it straight up with actual currency. By MS Points not being real currency, retailers can discount the cards periodically. There are pros and cons to both scenarios.
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Good point. I think any money I eventually lose from whatever points are left in my account after I make my last purchase will be less than the amount I've saved by paying less than retail for the points. Coupons and discounts that can't be applied to gift cards can be applied to MS points and live cards.

I'm not complaining about MS points, but I also wouldn't mind if MS allowed you to pay with a combination of points and cash. I don't think I want to give them my CC number though...

smackababy said:
Considering, I have 430MS points and the Rock Band song bundle costs 440, I've sat at that number of points because I refuse to buy 500 to be left with another wasted number. They knew what they were doing when they priced and sold MS points. I think this law suit could help change this money grabbing scheme.
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Yeah, they knew what they were doing - they were adding a layer of abstraction between Live and the dozens of different currencies that are used in the countries where they sell the Xbox. It reduces the hassle of dealing with exchange rates, processing transactions on foreign credit cards, etc. I doubt this was a "money grabbing scheme" - it'll net them at most a few dollars from each customer. It's a drop in the bucket.

If you want to complain about MS screwing their customers, we could talk about their accessory prices.
 
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mugs said:
Yeah, they knew what they were doing - they were adding a layer of abstraction between Live and the dozens of different currencies that are used in the countries where they sell the Xbox. It reduces the hassle of dealing with exchange rates, processing transactions on foreign credit cards, etc. I doubt this was a "money grabbing scheme" - it'll net them at most a few dollars from each customer. It's a drop in the bucket.
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Your point about currency rates may be true, but it's definitely a money grabbing scheme on multiple levels. It's not just the perpetual millions of dollars worth of unspent points sitting in people's accounts, there are psychological factors at work. By converting to points and not matching them directly with cents they've created a bit of a disconnect in the consumer's minds. You don't feel quite as guilty spending points as you do straight cash even though it's realistically the same thing. I'd say it's similar to why you price things at $19.99 instead of $20. It's only one cent, but the psychological difference is more important than the one cent.

Plus I'd wager that having a couple hundred extra points in your account gives many consumers a little nudge to spend them on something else. Of course, when they do, they likely find they have to buy more points (which is oh so easy.. just hit X!) and they end up with extra points anyway. The system is most definitely a money grabbing scheme.
 
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mugs said:
I doubt this was a "money grabbing scheme" - it'll net them at most a few dollars from each customer. It's a drop in the bucket.
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Live has something like 20M users right? If each one of those users has a dollar or so of unused MS points that isn't a drop in the bucket, that's some serious cash. You might want to rethink your reasoning on this one.
 
mindcycle said:
Live has something like 20M users right? If each one of those users has a dollar or so of unused MS points that isn't a drop in the bucket, that's some serious cash. You might want to rethink your reasoning on this one.
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This would only be true if you could "cash-out" your points. Millions of unused points aren't in MS's bank account accumulating interest - the money has already been spent.

The issue is not that MS is "stealing" money - it's that they have made it incredibly difficult to completely spend all points. They really aren't benefiting from unspent points. Where they do benefit is forcing people to add yet another odd number of points to their account to buy something.
 
oznerol said:
This would only be true if you could "cash-out" your points. Millions of unused points aren't in MS's bank account accumulating interest - the money has already been spent.
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What do you mean "already spent"? You've given them real world money for those points and they've not given you anything in return yet.
 
mindcycle said:
Live has something like 20M users right? If each one of those users has a dollar or so of unused MS points that isn't a drop in the bucket, that's some serious cash. You might want to rethink your reasoning on this one.
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A few dollars from people who spent $200-400 on the system, a few hundred dollars on games (MS gets license fees for the games they don't publish; the attach rate is more than 7 I believe), $30+ per year on Live, plus some unknown amount on XBLA purchases and accessories.

Yeah, I thought about it and the idea that this was a scheme for Microsoft to reap profits from people who have a small unusable balance in their account is idiotic.

Thraxen said:
Your point about currency rates may be true, but it's definitely a money grabbing scheme on multiple levels. It's not just the perpetual millions of dollars worth of unspent points sitting in people's accounts, there are psychological factors at work. By converting to points and not matching them directly with cents they've created a bit of a disconnect in the consumer's minds. You don't feel quite as guilty spending points as you do straight cash even though it's realistically the same thing. I'd say it's similar to why you price things at $19.99 instead of $20. It's only one cent, but the psychological difference is more important than the one cent.

Plus I'd wager that having a couple hundred extra points in your account gives many consumers a little nudge to spend them on something else. Of course, when they do, they likely find they have to buy more points (which is oh so easy.. just hit X!) and they end up with extra points anyway. The system is most definitely a money grabbing scheme.
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"Money grab" has a specific meaning, it implies unethical dealings. What you're describing is called "marketing." Using a pseudo-currency is not unethical.

(if they were using a pseudo-currency so they could get people to end up with unusable balances that would be unethical, but I think it's pretty obvious that wasn't Microsoft's motivation for using MS Points)
 
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mugs said:
Yeah, they knew what they were doing - they were adding a layer of abstraction between Live and the dozens of different currencies that are used in the countries where they sell the Xbox. It reduces the hassle of dealing with exchange rates, processing transactions on foreign credit cards, etc. I doubt this was a "money grabbing scheme" - it'll net them at most a few dollars from each customer. It's a drop in the bucket.

If you want to complain about MS screwing their customers, we could talk about their accessory prices.
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XboxLive is available in 26 countries, and they are already charging those currencies through the service fees. There is no reason for them to have such an oddly valued point system. I've no problems with the MS points themselves; I've only a problem with the fact that I have to buy them in amounts that do not equal what I want. I've no reason to buy 1600 when I only need 1200 for that Map Pack. That leaves me with 400, to which I'd like to buy a Rock Band track pack, but I have to purchase additional points to. And I'm talking about 500 additional points, not 50. You see how this is making me spend more money for what I'm getting in return. They are forcing me to buy more of their currency than it costs for an item. Now, this would be okay if I could buy some other DLC content, but alas, I cannot. I don't have enough to buy something and therefore must buy even more.

Whether you think so or not, this is a scheme to gain more money from the consumers. Strangely enough, some things just cost actual money...
 
mindcycle said:
How are they not benefiting from unused points? You've given them actual currency to obtain those points..
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The monetary transaction between Microsoft and the consumer ends when the points are purchased, not when the points are spent. It's the equivalent of trading quarters for tokens at an arcade. I'd argue that it's in Microsoft's best interest that the points are spent, as it promotes further point purchases (which is skewed even more with the ridiculous purchasing scheme they've set up, and are getting sued over).

Idle points really benefit no one. Sure, every time points get spent, Microsoft needs to pay royalties to the content's creator/publisher/etc. But really, that pales in comparison to the amount they make in point purchases.

smackababy said:
Whether you think so or not, this is a scheme to gain more money from the consumers. Strangely enough, some things just cost actual money...
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If you're referring to content on Xbox Live where you can pay with actual dollars, there is a reason for that. It is because whatever content it is - generally their full, retail games - the price is different based on the purchaser's region. It's actually what the point system helps Microsoft to avoid.
 
mugs said:
Yeah, I thought about it and the idea that this was a scheme for Microsoft to reap profits from people who have a small unusable balance in their account is idiotic.
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It may not have been a scheme to begin with (although I find that hard to believe), but they are definitely reaping profits from it. If you can't see that you're blind.

If a DLC pack I want to purchase for my favorite game costs 600 MS points that means I need to first obtain those 600 points right? If the system wasn't setup to rip people off then I should be able to purchase exactly 600 points ($7.50 US), yet I can only buy either 500 or 1000 points, not exactly 600 like I need. Thus, I end up buying 1000 points (which costs me $12.50), buy the DLC pack, and then have 400 points left over. So MS made and additional $5.00 off me that I wouldn't have otherwise spent.

mugs said:
(if they were using a pseudo-currency so they could get people to end up with unusable balances that would be unethical, but I think it's pretty obvious that wasn't Microsoft's motivation for using MS Points)
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The balances aren't unusable but they typically won't cover your next purchase, thus the balance cycle continues again and again everytime you want to buy something new. Once you make a purchase using MS points you will probably never bring that balance to 0 without either luck or some creative spending. The points system would work fine and be 100&#37; ethical if I was able to purchase exactly the points I need to buy what I want, but until that happens it will remain a ripoff for most people as they will always be overpaying for the content they purchase.
 
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It isn't just overpaying, but it is being forced to pay quite a bit. I have 430 MS points on my account. I would like to buy a Rock Band track pack (Thin Lizzy one if you are that interested) but it costs 10 more points than I have. I have no intention of buying any other DLC. I have to purchase 500 points in order to buy this pack.

This entire system is set up to make you purchase more and more DLC. If you could have even numbers where you frequently ended up with 0 points, people would spend less and buy less DLC as a result.

Despite what some of the people here believe, it is a marketing tool and it seems to work.
 
mugs said:
Yes, but it's a pretty significant difference.

And their "scheme to gain more money" has resulted in my spending less money (see above). Funny how that works.
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Yes, but it's difference I wasn't even talking about. I've seen "money grab" used to describe many situations which weren't unethical. As for your second point, you pretty much contradict yourself. Sure there will be people that object and spend less, but overall I'm sure it results in more money being spent... it's fairly basic marketing tactics.
 
mugs said:
If you want to complain about MS screwing their customers, we could talk about their accessory prices.
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OMG yes, this, ESPECIALLY the hard drive prices. $150 for a 120gb hd? Just because it has a plastic casing and is pre-formatted? I don't think so!
 
This is why I buy my MS points on the Zune marketplace. You can get them in denominations of 400, you don't need a zune or any software, they work on Xbox live, and I never have any left over.
 
i got home from the bar saturday night and my buddy and iw ere playing sf2 on sf:ac. so i was like 'let me just purchase HDR...'

so i go to the marketplace and find it.

it is 1200pts ($15) so I said cool.

i go to purchase points, and i couldnt get 1200. i could either only get 500, 1000, or 2000, which were $6.25, $1250, and $20 respectivtely.

because i couldn't just pay $15, they lost my money.

i did find out the next day though that you could buy points in better increments on the zune store, but it was too late at that point and since it wasnt an impulse buy anymore, and i didn't have a friend over to play against, i didnt buy it.
 
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