Any of you who signed up for Xbox Live Rewards received an email about how it is being changed.  Here’s a copy of the announcement I received in my email inbox:

IMPORTANT ANNOUNCEMENT:

As you may have heard from the announcements at E3, major changes are coming to Xbox Live. One of these changes is the switch to local currency for purchases on Xbox. That means Microsoft Points will soon be retired and you’ll instead be able to use money to purchase content on Xbox (see Xbox.com Points FAQ for more info).

With all these changes, it’s become necessary for us to evolve the way we reward you. Starting August 1, 2013, you will not be able to earn Microsoft Points through Xbox Live Rewards any longer. Not to worry, though! Since this currency change is impacting the structure of the program, we’re taking the opportunity to make Xbox Live Rewards even better. You’ll continue to get rewarded for doing the things you love on Xbox Live – just not with Microsoft Points. So come back to rewards.xbox.com on September 1, 2013 for the full scoop. You can also follow us at @XboxLiveRewards on Twitter for the latest updates.

Finally, despite the Microsoft Points changes, all your hard work will not go to waste. On August 7, 2013 we’ll deposit ALL your Pending Rewards Points into your account, even if you have less than 100. And if you still have Points in your Xbox account when Microsoft Points are retired, they’ll be transitioned into your country’s local currency. Your currency will be available for use at the Xbox Stores as usual. For more on the Points transition, see Xbox.com Points FAQ here.

So keep earning Microsoft Points with Xbox Live Rewards through July 31, 2013 – and stay tuned for exciting changes coming soon!

Sincerely,

Xbox Live Rewards Squad

And here’s a write up about it from Polygon with their take on it:

As part of its plan to transition from Microsoft Points to real currency, Microsoft will phase out Points-based Xbox Live Rewards beginning Aug. 1, according to an email sent to Polygon this morning.

Currently, the Xbox Live Rewards loyalty program gives members Microsoft Points and other digital goods for completing tasks on Xbox Live, including making purchases through the Marketplace, renewing Gold subscriptions, playing games and using other features. As Microsoft phases out Microsoft Points, they will no longer be offered as rewards, but the company states it has plans to replace them with something “even better.”

“Since this currency change is impacting the structure of the program, we’re taking the opportunity to make Xbox Live Rewards even better,” reads the statement from Microsoft. “You’ll continue to get rewarded for doing the things you love on Xbox Live — just not with Microsoft Points.”

According to the email, the Xbox Live Rewards website will be updated on Sept. 1 with information on the new rewards system.

Any pending Microsoft Points rewards will be added to players’ account balance on Aug. 7, and all remaining Points in players’ accounts once the full transition to real money occurs will also be converted into their country’s currency. A full FAQ on the transition is available on the Xbox support website.

Source