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Hackers developed an algorithm that allowed them to use old MS Points codes to make new ones

A group of hackers have scammed Microsoft out of $1.2 million after finding a way to generate new Microsoft Points out of old point codes. 

Microsoft Points is the currency for online stores such as the Games for Windows - Live Marketplace, Zune, Windows Live Gallery and the Xbox Live Marketplace. There are plenty of sites that provide free Microsoft Points, but it's rare to find one that is authentic. 

But on March 7, a team of hackers did some damage to Microsoft's pocket when they developed an algorithm that allowed them to use old MS Points codes to make new ones. They then created a website that allowed anyone to do the same just by refreshing the page. 

Each time a user refreshed the page, a new 160 point code would be available. Eventually, a heavy amount of traffic to the site yielded problems, which caused a 404 error message. 

Microsoft was able to pull the plug on the site, but still ended up losing $1.2 million in MS Points. No announcements have been made in regards to what Microsoft plans to do about this. 

The Escapist magazine posed the question as to whether Microsoft has a way of distinguishing which points are legitimate and which are counterfeit, so Microsoft could ban those who try to use the hack versions, but it is unknown whether the consumer electronics and software giant has these capabilities. 

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RE: Stupid points system...
By Hiawa23 on 3/10/2011 7:48:38 PM , Rating: 2
people bashing the points system, but honestly what difference does it make? Let's say, 100 pts equal $1.25. $4.99 gets you 400 pts. I use all my points, so the point system is not an issue. Either I use em now or on something else later. This is the system we have & MS aint changing so all the whining is moot as far as I a concerned.

RE: Stupid points system...
By TSS on 3/10/2011 8:50:10 PM , Rating: 2
It's 3 things that trick you: it's the "get something else later", the "it's only 100 points" and "the breaking up of expansions".

the "get somethign later" is easy. Most people buy too much points. If a game costs 4800 points while you can buy in 800, 4000 and 6000 quantities most people will buy the 6000 and "spend the rest later". This is money that they wouldn't have had if you'd gone to the store since then, you'd actually gotten what you wanted instead of what you wanted + something you MIGHT, but just as well might not want.

The "it's only 100 points" is simple too. The majority of people will stop converting points to money and just buy stuff that's a small amount. which means your actually paying more then you would in a store (which costs more trouble since you have to go outside and shop etc).

the "breaking up expansions" is where the devil in this all hides. Instead of selling you an expansion of content for $30 they can sell you the same content, in chunks, for $50. Druglords do the same, distribute drugs down to alot of dealers and sell in small chunks while buying in big. Hell, it's what everybody does, since everybody knows it's cheaper to buy in bulk. So it's very expensive to buy everything not only a piece, but per chunk.

Combine those 3 and you have a system that strongly encourages impulse buys and profit (remember, all of this is digital. they don't have to run a physical store for it which cuts out a lot of middle men).

RE: Stupid points system...
By tallcool1 on 3/11/2011 11:44:56 AM , Rating: 2
One thing you forgot to add is that per your comment of people buying more points than they need so that they have a positive point balance, is that you are giving MS an Interest free loan until you spend it! I am sure MS appreciate all the extra points (money) people have that go unspent on their MS account that they can make money off of.

RE: Stupid points system...
By rudy on 3/12/2011 1:38:06 AM , Rating: 2
On top of that they know that some amount of points never will be spent. Just like airlines and frequent flier miles, and stores with gift cards.

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