As part of the recent Xbox 360 system update, Microsoft Points will be retired and the Xbox.com PC Marketplace will be closed as of August 22, 2013. Microsoft encourages you to spend your Microsoft Points balance prior to this change. Although you will not be able to purchase new games, you can continue to enjoy previously purchased content by downloading it through the Games for Windows Live client software as usual.

Here is the FAQ from Microsoft:

What happens to the games and downloaded content that I purchased?
You can continue to enjoy previously purchased games and downloadable content in your catalog by downloading it through the Games for Windows Live client. Although the purchase functionality will be discontinued, the Games for Windows Live service will continue to operate as usual.

Can I still buy Games for Windows Live games?
No, the PC Marketplace on Xbox.com will discontinue selling Games for Windows Live titles as of August 22, 2013. For information about Games for Windows Live titles not published by Microsoft, please contact the title’s publisher.

Can I purchase in-game downloadable content for my current Games for Windows Live games after Microsoft Points go away?
In-game purchases and other downloadable content purchase availability will vary based on the particular game. Please contact specific game publisher for more information.

Will I be able to purchase Games for Windows Live games in other marketplaces now that Games for Windows Live titles are no longer available on Xbox.com?
Games for Windows Live titles published by Microsoft are no longer available for purchase from any marketplace. For other titles, please check directly with the title’s publishers.

What happens to my remaining Microsoft Points? Can I spend them?
Microsoft Points will be retired as part of the next Xbox 360 system update. The next time you initiate a purchase or redeem a Microsoft Points card or code on your console with your Microsoft account, we’ll add an amount of currency equal to or greater than the Marketplace value of your Microsoft Points to your account. You can then use the currency in your Microsoft account to buy a variety of Xbox content from your favorite Xbox stores, and if you have a Windows Phone 8 device, content from the Windows Phone Store.

Note If you do not have an Xbox 360, please contact customer support.

Where can I find out more about the retirement of Microsoft Points?
For more information, please visit Microsoft account transition to local currency.