Microsoft says price increases found on a new version of Xbox Live were an "unintended error" and that affected users will be completely reimbursed.

Xbox Live price increases
People walk near an Xbox signage at E3, the Electronic Entertainment Expo, in Los Angeles, California, 12 June. (Credit: Reuters)

The company is currently in the process of replacing its Microsoft Points virtual currency (MSP) with real money. Purchases made in a new version of Xbox Live, which is currently being beta-tested in various regions, are automatically converted from MSP to local currency, meaning that users making a purchase costing 1600 MSP, for example, will have their currency converted to £14.99.

But, as IBTimes UK reported yesterday, these conversions were lowering the value of MSP. Where the new version of Xbox Live converted 1600 MSP to £14.99, users could previously buy that amount of the virtual currency for £13.20.

However, Microsoft has since issued a statement saying the price hikes were accidental and not reflective of the prices that will be available when the new Xbox Live is launched in full:

"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. 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."

With the Xbox One and PlayStation 4 due out in November, both Microsoft and Sony are looking to draw more users into their digital stores. The companies are offering a greater range of independent games as well as quicker downloads and, in Sony's case, the ability to instantly stream games.

As Reddit users pointed out, the Xbox Live price increases placed downloadable games on the same level as those found on Sony's PlayStation Store, which has historically been more expensive. Although those prices have now been declared false, with competition surrounding digital stores increasing between Microsoft and Sony, it will be interesting to see which company is able to offer the lower prices and whether that will have an effect on console sales themselves.