Because you know the price. It's not much, but it is a reassurance.
Except you're unlikely to get a €20 card for €10 because that looks like free money, and retailers don't discount money. At least I don't see it. If you're lucky you get maybe 5% on credit or whatever you might stick on a store card, but basically cash is treated as cash. If MS sell €20 cards for €10, they'll be the first to do it that I know of. PSN cards can be a few quid cheaper than face value.
MS Points are just another currency. There'll be a local exchange rate for your currency and points, and there'll be a relative valu for regions buying points and what publishers get from those purchases. If the value of the dollar drops and the points bought by dollars aren't worth as much as points bought in yen, then MS would have to adjust the regional price for games to be equivalent, or just take less money from US gamers spending 400 points than Japanese gamers spending 400 points.
A cash system would be no different to PayPal, with regional pricing described in regional currency. Neither points nor cash is an obvious better choice (except for those who can get points cards at crazy discounts!), but it's easier to read cash. When Eurogamer list game prices as 400 points, I have no idea what that'd actually cost, whereas £3.99 means something to me, which is reassuring.
Well the nice thing with points is that in theory no matter where you go in the world everything on Xbox Live will cost the same amount of points. The only thing that changes is how much you pay for those points at the register.
So again, in theory, MS never has to adjust the price of games on Xbox Live due to fluctuating currency. They could in theory just adjust the price of the point cards in various countries if the currency variation is greater than that expected over time.
So with points, MS, in theory will always make the exact same amount of money no matter where in the world the game is sold.
In practice, however, I doubt it's really like this. I'm sure people in countries using non-US currency wouldn't like the price of their Xbox Points cards fluctuation up and down from year to year depending on how their currency is doing relative to the dollar.
So that may be another reason MS is dropping it. In theory points cards are great. It is immune to currency fluctuation (assuming MS always sells the cards at X US dollars to retailers in foreign countries) and it allows for a unified buying experience anywhere in the world.
But since consumers as I mentioned just prior would likely not take too kindly to the price of their cards fluctuating from year to year or even from month to month, that would make that first benefit moot.
And the second benefit I mentioned may not outweigh the convenience to a local buyer of being able to see directly how much a title will cost in their local currency.
Hence, it may be one of those things that sound better in theory than actually works out in practice.
The other thing is that the games themselves wouldn't be taxed (as they are "purchased" with a non-currency currency), and instead the points cards would be taxed. That could change the level of taxes charged. I don't know a LOT about tax laws, much less tax laws in foreign countries but it's entirely possible that "Gift Cards" are taxed differently than "Games." If real currency is used on Xbox Live (credit card, paypal, gift card...) then it must be taxed (at least in the US). If the Gift Card is also taxed, that double the tax paid with a cash value card. If Gift Cards aren't taxed, then you theoretically avoid taxes all together with a points card.
Regards,
SB
