Some interesting info has turned up in the Xbox Rewards FAQ stating that:
Since Rewards Points are Microsoft Points, you can redeem them directly at the Xbox LIVE Marketplace. There are no restrictions on the items you can purchase with your Rewards Points but make sure you use them before they expire on June 30, 2013
What does this mean? To me, it means the rumors about msp being discontinued at the end of 2012 are pretty solid info, as the 6/30/13 date would give you 6 months to spend whatever points are still in your account. I would assume the entire marketplace will go to how GoD is (price in real currency, with an option to use msp instead), then after 6/30/13, no more msp option.
Is it a good thing? To me, NO. While the option to purchase DLC and XBLA directly from a retailer (allowing you to use "alternate currency", i.e. trade ins, coupons, retail specific sales, etc.), the removal of msp means you will no longer be able to get discounted point cards, and might also trigger the end of using programs like Xbox and Bing rewards for XBL purchases. Granted, I would assume there will now simply be a POSA card at retail for specific dollar amounts (they do need to continue to cater to people with no credit cards and to people who don't want their info on the MS servers), but I have NEVER seen a "$20 giftcard" on sale for less than $20 (PSN cards, for example, at GS were never less than face value the entire time I worked there, while msp and Gold cards went on sale from time to time (3 months of Gold is on sale right now, actually)).
In my case, I always purchased msp smartly, using promotions and discounts to maximize my msp per dollar spent. If someone runs a B1G1 on 1600 pt cards, and has a limited quantitiy, you take their ad to Wal Mart or anywhere else that matches promotions, and go crazy! With the removal of msp as a currency on XBL it means that the $15 XBLA game is going to be $15 until it hits a DOTW or promotional sale, and to me that is going to mean less purchases overall. I don't mind paying for XBLA and DLC with discounted msp, or in a situation where money isn't so tight and you can buy some extra msp to "bank", then spend it later when you might not have cash, but you still have msp in your account, but if every purchase has to come right out of my pocket, I know there won't be as many purchases!
On the bright side, if msp is dying 12/31/12 (and we are all around to witness it), the announcement should be coming in the next few months, and we might see some great sales on msp cards as retailers clear their stock, and I plan to take advantage and use msp right up until the day they cut it off! The downside...how can I zero out my account with all the goofy pricing on things???
Jan 2012 article:http://www.insidemobileapps.com/2012/01/23/exclusive-microso...