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Lawsuit filed against Microsoft over MS Points in GFWL

Tuesday, 26th January 2010 17:14 GMT By Stephany Nunneley

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A class action lawsuit against Microsoft has been filed in Philadelphia over the MS Points system used in Games For Windows Live Marketplace.

Apparently, excess points left over after purchasing items cannot be used.

GFWL uses the same points system as Xbox 360, and attorney Samuel Lassoff of Horsham, PA, said Microsoft’s using the system to “collect revenues for digital goods and services which were not provided” with the system.

Apparently, Lassoff became privy to the issue after receiving an invoice from Microsoft showing “charges for purchases he couldn’t complete”.

Citing that Microsoft “engaged in a scheme to unjustly enrich itself through their fraudulent handling”,
Lassoff claims he and “hundreds” of other Xbox Live users have been overcharged.

“Microsoft breached that contract by collecting revenues for digital goods and services which were not provided,” Lassoff said in his lawsuit, per InformationWeek.

Microsoft has yet to respond to the lawsuit, but last week Aaron Greenberg revealed that the company never intended to “mislead” folks when using MS Points as currency and is looking into making the points system more transparent.

Via BigDownload.

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31 Comments

  1. Michael O’Connor

    What an idiot.

    You pay for the points, not the goods.

    #1 5 years ago
  2. Uncontested

    Not really an idiot, it is pretty much bullshit that they only sell in certain increments and most things you buy from M$ never equal those increments.

    #2 5 years ago
  3. RoarrrUK

    Clearly prompted by the recent defensive PR re these points by Microsoft – (no intention to mislead etc etc).

    I doubt he will win but I think he has a point. Didn’t Microsoft they have to put real current costs for Games On Demand as clearly, the % grab by setting fixed points at higher costs associated with GOW purchases, would not go down well (I don’t recall the PR reason they used exactly).

    Though this also could be said of wii points.

    The PSN has a slight issue aswell in that you can only load increments in units of say 5GBP. any purchase under 5, still requires purchase of 5GBP minimum on the card but anything over that say £7.99, allows for payment exact of that amount.

    #3 5 years ago
  4. Hunam

    To be honest, the point system is fine by me for the reason that it makes more sense across territories. People always complain on PSN about how x game costs more in the EU than in the US. With MS points you don’t get that as 800 points is 800 points everywhere.

    #4 5 years ago
  5. Eregol

    @3 You tend to find that all card transactions are subject to a handling fee, this is normally paid by the retailer at the point of sale.
    It’s most likely, that the 5 initial limit is because of this handling fee, because a smaller amount would result in a fee not worth paying.
    Anything over that amount then allows you to pay that exact amount.

    There’s a lot of retailers here in the UK that wont take Amex because it costs too much to transact, and other shops and stores wont take card payments unless the transaction amount is over a certain point, normally £10.

    #5 5 years ago
  6. Psychotext

    What an absurd thing to sue over. At best they’ll put in an option where you can select how many points you want and it’ll give you a price / let you buy them.

    …but that will still involve paying the official price, which should be avoided like the plague.

    #6 5 years ago
  7. RoarrrUK

    “800 points is 800 points everywhere”

    but doesn’t 800 points in terriory A cost more than terriotry B. Isn’t there still room for a % difference, (over and above typical currentcy exchange).

    Wasn’t the point that the fact that they’ve just given it a point number, the lack of transparency, given that it hides such issues, where as the PSN didnt but as you point out, results in more people complaining? I may be wrong..

    #7 5 years ago
  8. RoarrrUK

    @myself – I am wrong :( as you say a fixed advertised point value would (while still subject to a possible small % change as I suggested) be typically comparable across regsions, where as having cost pricing allows for settign any value.

    #8 5 years ago
  9. G1GAHURTZ

    Miser.

    #9 5 years ago
  10. Eregol

    According to Wikipedia, MS point prices equate to 11% more expensive than American prices.
    http://en.wikipedia.org/wiki/Microsoft_Points#Point_cost_per_region

    #10 5 years ago
  11. endgame

    just as they have expressed the prices in points they can easily do it in dollars. gog does that and it works fine. anyone saying otherwise is a idiot. oh and the guy has a point obviously. anyone saying otherwise is a rich f**k or someone who doesn’t work for the money he gets. obviously. cheers.

    #11 5 years ago
  12. blackdreamhunk

    right on! they should also show how micro soft likes abuse pc gamers too!!

    #12 5 years ago
  13. G1GAHURTZ

    Yeah, OK endgame.

    I suppose it’s perfectly LOGICAL to pay a couple of hundred dollars for a console, then complain that you need to BUY more points than actually necessary in order to BUY more games for it…

    Surely this poor guy is living on welfare and just wants to sue so that he can spend those extra few dollars on bread and water, right???

    EDIT: Sorry, this is GFWL, so it’s not console, but PC. It’s probably BDH.

    #13 5 years ago
  14. Retroid

    @Eregol: I always buy my MS points discounted anyway :)

    #14 5 years ago
  15. Eregol

    Heh. Wish I could do the same with my PSN money.

    But anyway, I think the same of MS points as I do with Nintendo points. I think they’re pointless (silly pun).

    I don’t see why I should exchange my cash for points THEN spend those points on something else. Just let me spend my money in an easy to understand way.
    Having a middle-man doesn’t help anyone.

    #15 5 years ago
  16. McLovin85

    “People always complain on PSN about how x game costs more in the EU than in the US. With MS points you don’t get that as 800 points is 800 points everywhere”

    lol, i’m sorry Hunam but i hope ur joking about this??…

    yes 800 points = 800 points but that’s irrelevant, it’s the underlying currency that determines how much something in each country costs.

    say 100points = 1 Euro in Europe and 100points = 1 US Dollar in America

    so ur telling me that 800 points = 800 points, therefore 8 Euro in Europe is equal to 8 Dollars in the US. Now u tell me, is that the same price?

    It’s exactly this sort of confusion that Points are designed to create.
    PSN is more transparent as it uses local currency and all it does is show that games in America are cheaper to buy, like they have been for the last couple of years.

    #16 5 years ago
  17. Psychotext

    “It’s exactly this sort of confusion that Points are designed to create.”

    I think you’re automatically assuming the worst here. Have you any idea how much money is saved by having one price, worldwide for thousands of products, vs having 5 prices for each of those products? (and dealing with the inevitable fluctuations in exchange rates and pricing affecting them) That’s why it’s done.

    That the conversions are hidden is neither a good thing or a bad thing. We’re certainly not paying any more of a premium than we’re used to paying (US vs UK)… so it’s not like they’re using it as s smokescreen to get more money from us than usual.

    #17 5 years ago
  18. OlderGamer

    A couple of thoughts:

    Where do you guys(seemingly mostly UK) get discounted points? No where I know of or have ever seen(US) has them. Once in awhile they are given away as perks for things like Credit Card purchases, or bundled in games/systems. Mostly they are in small amounts and you more then pay for them in the cost of what your buying. Even Ebay doesn’t sell em at reduced costs, unless like I said they are bundled in with something else. I am sure there are exceptions, but I haven’t run across them.

    Also, this guy is right. 100% right. If points where not designed to induce confusion, and create a situation where you needed to buy more points then you need, in order to convince you to buy more points later to add to the ones that were originialy left over …. and so forth, why even have a point system to begin with? Wouldn’t have cash been easier and made more sense in the first place?

    of course it would, but a cash based system wouldn’t have encouraged extra/after the fact purchases. Cash would have made more MS less over all money.

    So yes, he has a point. And Mr Greenberg, even said so. Will he win his case? Very unlikly. The only decent thing going to come out of all of this is that going forward DD services across all systems, may very well want to offer cash equvelents. But then they won’t want to, because there will be less demand for said point card sales at retail. And I beleive MS/Wii point cards were also marketed as a way to apeise retailers in the conversaition of DD.

    #18 5 years ago
  19. Psychotext

    “Where do you guys(seemingly mostly UK) get discounted points?”

    Retail. For instance, at the moment it’s possible to get 2100 points for £13.75, vs the £17.99 you’d pay on the dashboard.

    #19 5 years ago
  20. McLovin85

    @PT

    I don’t mean to assume the worst it’s just that i don’t feel there is a need for points.

    How much money does it save really? Every territory has it’s own offices and they deal with their products locally so MS in America wouldn’t need to concern itself with MS in Europe and i’m sure dealing in local currency isn’t that mind boggeling.

    I’m interested in that middle statement u made:

    “and dealing with the inevitable fluctuations in exchange rates and pricing affecting them”

    It makes no difference what ‘currency’ u have or invent, it will still be subject to exchange rate and inflation fluctuations. Just because something 2 years ago was worth 800points doesn’t mean that something today is worth exactly the same 800points when talking about it in real world currency. So MS will still need to keep an eye out on real world currency when choosing a price point with their MS points.

    If it’s such an advantage and SO much money is saved why don’t Sony, Apple or Valve have their own currency for their respected online stores.

    #20 5 years ago
  21. Psychotext

    “Every territory has it’s own offices and they deal with their products locally so MS in America wouldn’t need to concern itself with MS in Europe”

    That’s specifically what they’ve avoided though. Take a look at the PSN and how that works… we’ll often get a game released months in advance in one territory vs another. Then look at XBL. With a couple of very rare exceptions games go live worldwide, at exactly the same time. There’s a massive amount of admin avoided (and staff headcount reduced) by not messing around with individual locations and pricing. Microsoft doesn’t have regional offices in the same way Sony has SCEE, SCEA etc.

    As for the currency fluctuations, surely you can see that changing the price of one product when applicable (MS Points) is far, far easier than administering thousands of products (and it really is thousands), or deciding which products you shouldn’t change the price on and thus take a bath on changing exchange rates.

    As for why others don’t do it… as you can see here, there’s a trade off in perceived transparency and apparently that’s not a price they’re willing to pay.

    But like I said in my other post, take a look at what things cost in real terms (UK vs US, and PSN is probably a good example) and you’ll see that they’re not using this smokescreen to charge us more. For me, I like knowing that something is 800, 1200, etc points. On a related note, I was recently looking for some historical game prices on PSN… and all I was able to find was the dollar costs. I imagine it would be even worse for smaller locations.

    Edit – Funnily enough, I was just looking at some games to compare US / UK / EU prices for PSN and XBL. Think I can find the UK / EU prices for them? Can I hell. :P

    #21 5 years ago
  22. Psychotext

    Oh, and yeah… people should be able to buy exact numbers of points. But that’s more to do with the original topic than the current discussion. :)

    I can’t say that one’s a worry for me either though. I have £28 sat on my PSN account right now, and around 8000 MS points. I know I’ll spend them eventually, and I’m able to save a fortune by buying when there are deals on. \o/

    #22 5 years ago
  23. MushroomStamp

    Personally.. I Love the Points :) because several times a year wal-mart and Toy-r-us puts the point cards on sale for 2 for 1.. .so you essentially are buying things from MS Store at 1/2 price :) if it goes to real money values then I lose that ability

    #23 5 years ago
  24. Psychotext

    Since the release of the PSN cards that’s not exactly true. I’ve bought a number of £20 cards for £14 each.

    #24 5 years ago
  25. AHA-Lambda

    @ 24 – please tell me how :)

    #25 5 years ago
  26. Psychotext

    Hot UK Deals is your friend.

    #26 5 years ago
  27. McLovin85

    I think the difference in release dates has more to do with localisation than using local currency. But i do agree the PSN is a joke when it comes to releasing games simultaniously, but that’s just SCEE’s incompetence. Although MS might not be set up like SCEE i can assure u they have offices in pretty much every territory e.g. MS UK, MS Germany, MS France etc.

    I don’t think there would be much administration as once a price point it made there wouldn’t be a need to change it (other than special offers etc). If real world prices were to fluctuate to such a degree that they did need to change prices on the PSN, the same effect would be had on XBL. They might not need to change how much goods on the store cost but the cost of MS Points would need to be adjusted, therefore passing off the adminstration to retailers.

    I don’t think that they’re using MS Points as a way of getting more money out of people but i do think that they have used them to give the illusion that the products on XBL are exactly the same price worldwide. 1000 MS points in the USA doesn’t equate to 1000 MS points in Europe when talking about real world currency (as i have shown in my previous post).
    So to some extent i do think they have used it as a smokescreen, not to exploit people but to sneakily suggest that all products cost the same worldwide which simply just isn’t the case.

    #27 5 years ago
  28. OlderGamer

    So not fair lol.

    Full price for point …*grumbles under his breath

    #28 5 years ago
  29. zajacxxx

    #29 5 years ago
  30. zajacxxx

    because i found in small country in europe (polan) on page http://www.xboxlivesklep.pl/punkty-xbox-live.html cheaper prices than in us? can i buy it? are the same points?

    #30 5 years ago
  31. Psychotext

    No, European points don’t work in the US.

    #31 5 years ago

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