Question: What Are Microsoft Points?
Answer: Many of the downlaods on the Xbox Live Marketplace are free, but for some premium content you have to redeem Microsoft Points to purchase that particular download.
Microsoft Points have to be purchased either with a credit card on your Xbox 360 or you can buy points at retail locations. The math comes out to be that 80 Microsoft Points = $1. So, for example, a 400 point arcade game sets you back $5 in real money. You can buy points in a number of different allotments ranging from just a couple hundred all the way up to 5000 points at a time.
It isn't the greatest exchange rate, but it makes transactions in the Xbox Live Marketplace very easy and painless.
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