Microsoft’s Zune Marketplace will sell individual songs for Windows PCs and Zune digital media players “through a system called Microsoft Points. 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,” Candace Lombardi reported in late September for CNET News.
Lombardi reported, “The point system is already used in the Xbox Live Marketplace, and Microsoft plans to host other online stores where Microsoft points can be redeemed, according to Katy Gentes, product marketing manager for Zune. In the United States, points are available in denominations of $5 for 400 points, $15 for 1,200, $25 for 2,000 and $50 for 4,000. That makes $1 worth about 80 points.”
Full article here.
MacDailyNews Take: Several MacDailyNews readers have suggested that we do the math, so here’s the deal:
• 79 Microsoft Points equals 99-cents or one song.
• The smallest amount of Microsoft Points available for purchase is $5.00 or 400 points.
• Each Microsoft Point is worth 1.25-cents.
• So, you give Microsoft your $5 and buy your 5 songs. That’s 395 total points. Microsoft has your 5 points or 6.25-cents “left over.”
• Say you want an album’s worth, or 10 songs? You give Microsoft $10 for 800 points and buy 10 songs for 790 points. Microsoft has your 10 points or 12.5-cents “left over.”
• See where we’re headed? Microsoft is taking money from their pigeons, er… “customers” and placing it in an interest-bearing account to earn themselves more money on their generous customers’ interest-free “loans.”
• Now, if you don’t wish to give Microsoft your money to use for free to generate interest income for Microsoft, you need to figure out exactly how many 79-point songs to buy, so that no points are left over. The magic formula to avoid giving Microsoft a free loan is 79 points x 400 (smallest denomination available for purchase) = 31,600 points or 400 songs at 79 points each. Total cost: US$395. Not very practical, is it?So, the real point is clear: Microsoft’s “points” are designed to confuse consumers and generate interest income from “left over” amounts. Now you know exactly why “1 Microsoft Point” doesn’t equal “1 U.S. Cent.” Boy, if Microsoft can dupe enough people into this Microsoft Points scheme, those “left overs” will really add up.
To buy even a single 99-cent song from the Zune store, you have to purchase blocks of “points” from Microsoft, in increments of at least $5. You can’t just click and have the 99 cents deducted from a credit card, as you can with iTunes. You must first add points to your account, then buy songs with these points. So, even if you are buying only one song, you have to allow Microsoft, one of the world’s richest companies, to hold on to at least $4.01 of your money until you buy another. And the point system is deceptive. Songs are priced at 79 points, which some people might think means 79 cents. But 79 points actually cost 99 cents. – Walt Mossberg, The Wall Street Journal, November 09, 2006
In stark contrast to Microsoft, Apple charges real currency. You buy a song from the U.S. iTunes Store for 99-cents, you pay 99-cents. You can buy one just one song, if you like, and you’ll be charged 99-cents. No left overs. No formulas. No “points” scheme. Just a single, simple, straight-up, honest transaction.
It’s marketing and it’s psychological. Buying something for 79 points seems less than buying something for 99 cents..
clearly allen, you intend to redefine logic.
see, here on earth, .79 IS ALWAYS less than .99
Uhm
Whats the point with Microsoft deals?
I’m so tired of Microsoft I cannot even tell you. I have been a Windows user since Windows 3.1 and have used every version since then. Two years ago I switched to a Mac. My eyes were opened and I see more and more what crap they do. They are a horrible, horrible company with very little ethics. Now, Bill Gates is at least using his money for good right now, so I don’t want to pick on him. But his company SUCKS. Makes me wonder if he is involved in philanthropy because of his guilt over his past business tactics. Nah.
And why do we even care? Zune is a lost cause. Let’s get over it before Microsoft does.
1.A large majority of people in the world don’t own credit cards or debit cards.This eliminates that barrier.
2.Those points will be used for marketing promotions and prizes in the future.
It gets worse. Apple charges my local sales tax on my iTunes purchases. I would assume Microshaft would do the same, so when I wanted to buy my 5 songs with my 400 points, where wouldn’t be enough points to pay for the sales tax, so I’d have to buy another 400 points to cover the tax. Or, maybe they charge me sales tax when I buy the point. My brain hurts just thinking about it. Stick with Apple. It’s just easier.
Microsoft may also be working to improve their cost margins by reducing credit card transactions fees.
There is a transaction cost for charging to a credit card. Charging less frequently and at higher amout per transaction can also reduce the transaction costs which Microsoft pays.
Credit cards are often unaware or forget about the transaction cost paid as a percentage on the retailer’s side.
another good example of how Microsoft designs things with THEIR interests first and foremost, not the consumers/
there is no consumer advantage to the points system. it simply provides Microsoft an interest free loan from your pocket.
>It gets worse. Apple charges my local sales tax on my iTunes purchases.>NOT TRUE!!
I bought 1 tune in Cal. from the Apple store. My credit card was charged 99c. I did it specifically to check the total cost of 1 tune.
OK, Let’s close microsoft and give the “POINTS” back to the shareholders….. Rigth Mr. Dell?
“Calling all mathematicians! Can you buy Microsoft Points (available in denominations of $5 for 400 points, $15 for 1,200, $25 for 2,000 and $50 for 4,000) in such a way as to buy your songs without leaving any free “left overs” for Microsoft to use to generate interest income? If so, what’s the formula?”
Guys, you don´t need to be a mathematician for this one: Don´t hold me accountable if the use of technical terms isn´t corretc, as I´m no native english speaker, but the solution is this:
– one song: 79
– smallest set: 400
– what´s the lowest common multiple (LCM)?
– in order to determine that that question it is helpful to find out if these two numbers have a greatest common factor (GCF)
– 79 is prime number, so there is no CGF, so the LCM is 79*400 or 31,200, exactly twice the number you guys came up with.
or:
– seven (7) $50 sets of points for 28,000
– one (1) $25 set of points for 2,000
– one (1) $15 set of points for 1,200
$390 total
Rgrds
Matt from Spain
Not that uncommon – expect to see this more and more on other online retail sites that have to deal with micropayments that would otherwise get eaten up by credit card transaction fees. Ever wonder why iTunes waits several days to charge your CC? It’s because they want to rack up any other purchases you make on following days into the same batch and save on processing fees. What MS is doing isn’t too far from buying a gift certificate or gift card. Retailer retains balance until it’s used up. Nothing that shady here. Consider it a mini paypal account within MS. I’m a mac person, but I’m just looking at this from a sensible business perspective.
Yeah, it’s easy.
– three (3) $50 sets of points for 12,000
– one (1) $25 set of points for 2,000
– minus the square root of $15 set of points @ 1,200 each.
– Add the natural log of the smaller of the first two numbers.
– No, sorry, I mean subtract the log base 10 of the larger of the two numbers.
– No, sorry, ummm, I think its actually the inverse of the first set of 15 points…
– No, ummm………
– Oh, bugger it, I’ll get an iPod.
No, no, no Micro Me.
You ADD the square root of $15 set of points @ 1,200 each.
Jeez, Microsoft goes to all this trouble for you and you still don’t get it.
Now, sit up straight, and pay attention.
And, no, you can’t go out for a zune.
Here is another way, I think …
Buy a block of 400p. Buy 4 songs. Leaves a remainder of 84p. Buy another block of 400p. Buy 4 songs. Leaves a remainder of 168p. And so on.
Do this 79 times. By then you will have 6636 points which allows you to buy 84 songs with no remainder.
Grand total 80*5=$4,000.
Simple.
Matt, I still get 74 points remaining after buying songs with your 31,200 points. Not that I intend to have anything to do with the brown squirter, but one solution is: (2) $5 sets of 400, (2) $15 sets of 1200, and (15) $50 sets of 4000 for a total of $790 and 63,200 points. That’s exactly 800 songs with no points remaining.
Someone check my math…
I wonder if the points expire, or otherwise explode? Good for three days only, or the first three song purchases? Can you share your points with a friend?
Matt was right, just got his 79*400 wrong
79 is a prime so it is its own lowest factor.
400 points is minimum purchase.
So you need 31,600 points.
seven (7) $50 sets of points for 28,000
– one (1) $25 set of points for 2,000
– one (1) $15 set of points for 1,200
– one (1) $5 set for 400
$395 total
Hey guys, the maths is easy.
First note that M$ formulae gives no discount for bulk purchases so to keep it simple we will only consider $5 blocks.
Buy 79 blocks of $5 (400 points) for a total of $395
This will let you purchase 400 songs exactly.
Now I don’t know about you but the thought of selecting 400 songs in one session just to prevent M$ from getting advantage financially makes my head hurt. Yet if you do not, then M$ is making money off all these little slices of our money. It sounds like the salami computer fraud technique, only executed legally and with the victims consent.
I will stick with my iPod and just pay for what I want at the time I want it. Every company that operates a points purchase scheme does so for their own benefit and not for the benefit of their customers. My personal opinion is that such schemes ought to be illegal under consumer protection laws. They are all legalised fraud.
As for M$ paying charges on each transaction – bol***ks. Don’t forget the M$ owns a bank. They pay charges to the credit cards that are less than Apple which does not own a bank and therefore participate in the closed club that is bankers clearing.
well, obviously not all of them,
just realised there is no discount for bulk purchases
therefore you have to basically just have to buy 79 sets of 400 points
may as well be $5’s…
79×400/5=$395
done
i wonder if you buy 79 sets of $5 microsoft has to pay credit charges on each one…….
I was sitting here going crazy with the calculator and then I CAME UP WITH THE ANSWER!!
fsck them….
ian / times tables:
yeah right, I go right back, it should hit me in the eye the first time:
79 * 400 must be sth with xxx600 ( 9+4 ), but somehow I screwed this up
sorry
Matt
I think that’s 31,600 not 31,200 which cost $395. There is no discount for buying larger lots of points; $5 gets you 400 points (79 * 400) as you said. These points can be purchased in many different combinations of point unit groups. So as you (almost) stated the minimum transaction is:
– seven (7) $50 sets of points for 28,000
– one (1) $25 set of points for 2,000
– one (1) $15 set of points for 1,200
(and) one (1) $5 set of points for 400
Lots of 400 songs to avoid leftovers.
Hey guys,
Matt from spain was right, but his multiplication sucks
79 x 400 = 31,600 points … this obviously works as you get 400 songs exactly at 79 points.
Now on the cost = 79 x $5 = $395
….. Now, excluding sales tax from the calc, that is $146 more than buying a new 30gb iPod … and all that so as not to leave a few cents to M$ (which is a good enough cause of course)
hmmm … Never did like the M$ guys anyway … stick to your iPods … you all have one anyway so there is no compelling reason to change.
Cheers
In my countrys, 79 point make enough for good sexytime with prostitute.