Microsoft will abandon its Points based currency in favour of a real world money system, a new report has confirmed.

Tech website the Verge claims that "sources familiar with Microsoft's Xbox plans have revealed plans to replace Points with a new gift card system". It is said that the new system will likely be revealed at E3, or sooner at the official Next Xbox event.

In response, Microsoft has stated that "it's clear its points system is in the early stages of being phased out fully in favour of a local currency one". CVG has contacted Microsoft for further clarification.
However, the company said the Xbox 360 will not likely use any system beyond Microsoft Points, meaning there could be some price comparison issues for future releases, depending on how long Microsoft will support its 360 system for.

The new gift cards are said will work in a manner similar to Apple's iTunes vouchers, which will allow Xbox customers to acquire real-world currency. Cash transactions via credit and debit cards are also expected. It is also said that the new system will work across a whole suite of software from Windows Store to Windows Phone, as Microsoft prepares to better integrate its PC and device services.

In October, Microsoft revealed it was phasing out MS Points for its Windows 8 service.