If Microsoft is considering dropping points, shouldn't you?

File this under 'unsubstantiated rumors,' but a report circulating widely this week claims that Microsoft is sunsetting its Microsoft Points system, currently used for some (but not all) Xbox Live purchases.

Inside Mobile Apps says: "Microsoft’s proprietary virtual currency system, Microsoft Points, will be phased out by the end of the year, according to a source with knowledge of the company’s decision. The change will affect developers for Windows Phone, the Zune marketplace and Xbox Live."

That's the only source for the story right now, and Microsoft has refused to comment, so take that report with a grain of salt -- but it brings up an interesting issue. So many game mechanics rely on proprietary points systems, especially gamification plays that involve collecting or loyalty card programs. Is the humble 'point' a needless level of abstraction?

For those who do not consider themselves 'gamers,' which is really the target audience for a good mainstream gamification project, the very idea of collecting points may seem a little too Xbox-like (or insert your own video game reference here). Perhaps by replacing these arbitrary points with something like real-world rewards -- product discounts, for example -- we can form a stronger bond between the user, the game mechanics, and the goods or services being promoted.

Of course, Microsoft could always keep the points system for purchases, which allows the company to charge the same amount (800 points, for example) in different regions. And, of course, there's little chance of dropping the Xbox Live Gamerscore, which tracks achievements across different games for a persistent running tally of your in-game skills. But the question should be asked: Is the arbitrary 'point' a concept whose time has come?