Hackers discover algorithm to generate Microsoft Points

Microsoft was reportedly scammed out of around $1.2 million in virtual currency early this week, due to hackers devising an algorithm that allowed used Microsoft Points codes to be recycled.

The group offered 'free' Microsoft Points on their website, reports SaveandQuit, while the tool to regenerate the codes was hosted on popular filesharing services.

One user claimed to have amassed $150 in personal points within 20 minutes. Microsoft was able to close down the exploit in a timely fashion, but third-party calculations claim losses before then topped $1 million.

Reportedly, the nature of the scam means Microsoft may not be able to identify which XBLA accounts used the generated codes.