After 8 or so years, Microsoft is finally scrapping its space bucks program and moving to something that makes much more sense.

Announced at E3 but nothing specific was given; Microsoft have finally revealed the next update will remove Microsoft points.

No word on when the update will be hitting, other than sometime later this year. The update will automatically convert any Microsoft points you have on your account to the equivalent in your local currency.

Later this year, retailers around the world will drop Microsoft point cards and replace them with actual gift cards (£10 etc.) which when redeemed, will be added to your virtual wallet. You’ll also be able to purchase items directly through Xbox LIVE with your debit and/or credit card.

If you’re in the current Xbox 360 beta (which was available through the dashboard a few weeks ago) you’ll already be using the new system and may have unfortunately realised that because of exchange rates, you may end up paying significantly more than other people around the world.