The Absolute Ingeniousness of Microsoft
I just figured out why Microsoft is so good at taking your money - Microsoft points. Instead of allowing you to directly purchase stuff from Xbox Live Marketplace using Credit Cards, you have to go to a store and buy Microsoft points in order to buy things. The ingeniousness of using this technique lies in the fact that it allows Microsoft to easily gain money.
First of all, this technique allows kids who don't have credit cards to buy stuff from the Marketplace. Normally if you were a teenager or what not, you'll need your parents permission to buy something from the Marketplace. By having Microsoft points, anybody no matter the age, can purchase stuff online.
Second, the conversion rate of Microsoft points are so awkward (100 pts = $1.25) that people lose track of how much they are spending. I mean think about it, which one sounds more, I'm going spend x dollars on something or x Microsoft points on something. Microsoft points really inhibit your judgment on how much something costs. It allows you to download something that you otherwise would not download had it been advertised in dollar amounts.
And finally, Microsoft points are essentially like gift cards. It makes you want to buy more. Because Microsoft already earns your money when you buy the points at the store, it does not care what you do with the points after you buy it. However, since the buyer has the points, he will be inclined to purchase something from the Marketplace. And because the conversion rate is so weird, it's almost inevitable that you will have Microsoft points left over. Like my brother has 40 points left on his account. You can't really buy anything with 40 pts so you are inclined to buy more points in order to clear your balance.
So my question is, how come other companies don't do this? I mean think about it, in the depression era of the 30's numerous land owners devised a means to take money from tenant farmers. They had these farmers work for lower than minimum wage, and then paid them with "credits" in which you could use to buy living essentials from a store owned by the land owners. So the tenent farmers had no way to actually get money and eave the farms. So why doesn't stores like McDonalds do this? Force you to buy some McCredits in order to purchase food and have the McCredit conversion rate be really weird. You'll therefore always have some McCredits in your pocket, advertising and reminding you to go to the next McDonalds you see.
Yeah, I was gonna say that it was the same ecenomic theory as gift cards. Once you spend money on the points MicroSoft is like T-Pain because they have money in the bank. You can't spend it on something else.
But you already knew that.