Microsoft will transition its Xbox LIVE, Windows Phone and Zune Marketplace stores to real world currencies in 2012, doing away with its Microsoft Points system by the year end, reports Inside Mobile Apps.

By the year end it is reported that all transactions will be made using real money set for the region within which the purchase is being made.

Microsoft has refused to comment.

Microsoft Points have been a point of much debate amongst users of Microsoft's services, but it certainly seems somewhat outdated given that the firm's rivals have successfully been using real money transactions for years.

For the Windows Phone platform in particular, parity with iPhone and the App Store is vital. Whist app purchases are made using real money, in-app purchases can be made using MS Points, which presents an unnecessarily confusing option to consumers.

On Xbox LIVE the inability to purchase only the points required to cover the cost of the desired content has proved to be an annoyance, but Xbox gamers have often benefited from generous Pounds to Points conversations, making like for like content cheaper on Xbox LIVE than the rival PSN service. Whether Xbox LIVE will continue to offer cheaper content when real money values are placed on content remains to be seen.

Similarly, the switch to real money may still require users to deposit a minimum amount of cash into their account, which is the case for PSN.