Microsoft is doing away with the points system used to purchase virtual goods on the Xbox gaming console. In its place, Redmond will adopt a gift card system according to sources familiar with Microsoft’s Xbox plans as first reported by The Verge.

The decision follows a similar move away from virtual currency in Windows 8 and in many people’s opinion, is a long time in the making. As we understand it, the gift card system will work similar to how Apple issues vouchers in iTunes. This will allow gamers to purchase real currency that can then be used to buy digital content. What’s more, the system will also accept traditional payment methods like credit and debit cards.

Sources say the new service will work across the full line of Windows marketplaces including the Windows Store, Windows Phone Store and on the Xbox. Gift cards are already in use by Microsoft in their retail stores but unfortunately, these can only be used in brick and mortar stores.

One would think it wise to announce the new feature during the company’s Xbox 720 unveiling next week but that apparently isn’t in the cards. Instead, Microsoft is expected to announce the new system during E3 next month. It should be ready to launch later this year in time for the company’s next generation console.

Do you prefer a points system for buying digital goods online or would you rather Microsoft use a real currency system so you know exactly how much you are spending per transaction without having to do any conversions?