It's finally time to say good riddance to Microsoft Points, the virtual currency that was tied to the company's Xbox 360 game console.
Microsoft announced the end of Microsoft Points last month, and is now making the switch to local currency. The changeover is part of an Xbox Live update that's rolling out now.
For users who still have Microsoft Points left over on their accounts, these points will convert to local currency the next time you make a purchase on an Xbox 360 console. Just one word of caution: this converted currency will expire on June 1, 2015. There's no expiration on currency you purchase after the transition.
Microsoft also plans to launch local currency Xbox Gift Cards toward the end of the year. In the meantime, retailers will keep selling gift cards with Microsoft Points; they'll simply convert to local currency when you redeem the cards on your console. Microsoft says it has no plans to stop accepting previously purchased cards or codes.
The other thing to note with the changeover is the way taxes are applied. Previously, taxes were taken out when you bought the Microsoft Points. With local currency, you pay taxes when purchasing the actual content. Microsoft says it won't double-dip on Points that you've converted to real currency. Since you've already paid taxes on them once, you won't have to do so again when making a purchase.
Microsoft Points were loathed by users because they obfuscated the real-world value of games and other content. In the United States, 800 Microsoft Points were equal to $10, so it was easy to lose track of how much you were actually paying.
Also, Microsoft used to only sell points in amounts that did not line up with the cost of games. While most downloadable games were priced in 400-point increments, you could only buy increments of 500 points at a time, so you'd end up with loose change on every purchase. Microsoft altered the way it sold points to better line up with game prices in 2010.
For more details on the switch to local currency, check out Microsoft's FAQ page.