The issue that resulted in rising prices when converting Microsoft Points to real currency, as a result of beta-testing for the new Xbox 360 dashboard update, is an "unintended error" that Microsoft is "in the process of fixing." It was originally believed that Microsoft was raising the price of its games as a result of changing to a real-world, local currency system. The new, local currency prices were higher than if it were paid for with Microsoft Points, but were more in line with prices on PSN. As it turns out, it's all a big mistake anyway.
"We are aware that select regions experienced some incorrect game title pricing in the Xbox Live beta. This was an unintended error that we are in the process of fixing," a Microsoft spokesperson told Joystiq. "We'll be reimbursing impacted beta participants for the difference in what was paid and what the price will be after the update is available to all members.
"Of note, beta programs give us a chance to test, fix and correct issues like this. As with all betas, we take the learnings from our program and make corrections and adjustments prior to the update being available to all members. As always, we appreciate the participation of our beta customers in helping us launch and build great products."