Microsoft have confirmed that MS Points are coming to an end as of the next system update.
In an email sent out to Xbox Live account holders over the weekend, the company confirmed the end of the scheme, with future purchases being made using real currency, a promise made during the conference at E3 in June:
“After the next Xbox 360 system update, when you next choose to initiate a purchase or redeem a Points card or code with your Microsoft account, we’ll put into your account an amount of currency equal to or greater than the marketplace value of your Microsoft Points. Your Microsoft Points will be retired, and you’ll immediately be able to use your new funds, in addition to other current payment methods available in your region, to purchase content from your favorite Xbox stores – or the Windows Phone Store on Windows Phone 8.”
As confirmed by Microsoft at E3, any leftover MS points as of the changeover date will be converted into real-life funds.