According to reports Microsoft’s proprietary virtual currency system Microsoft Points will be phased out by the end of 2012. This will affect the marketplaces on Windows Phone, Zune Marketplace and most prominently on Xbox Live.

Reports are that transactions will instead be based on a regional purchasing account and based upon real currency, which for Windows Phone would put it on par with the App Store and the Android Market. For Xbox Live, this would mean that content would now not just be listed in real dollar amounts and not necessitate buying Microsoft Points in “blocks.”

Source: Inside Mobile Apps