But how do they buy bitcoin in the first place?
Exactly. As things stand now, they pretty much need a banking account. How many 13-year-olds have banking account? Not many.
And what OP fails to mention is, you can already go to any retailer and buy an XBOX Live card for cash, which is then used with Microsoft. Buying a $20 Xbox Live Card at WalMart is a hell of a lot easier than figuring out how to buy bitcoins for the first time, especially if you don't have a bank account.
This move is merely to encourage current holders of bitcoins to spend them with Microsoft. A large portion of bitcoin enthusiasts are nerdish young men, so of course Microsoft will do something like this to target them.
I know this is an exception to the rule, but in The Netherlands there is a company where you can buy Bitcoin for very close to market price with a system called iDeal, it works kind of like paypal but differently.
People younger than 18 need permission from their parents to use iDeal. The way it works is that you use a 2 factor authenticator to check your bank account balance online, but this 2 factor authenticator can also be used to authorize a payment directly from your bank account to someone else. This is a pretty brilliant system and has helped me out many, many times, since I don't have paypal. I'm puzzled as to why there are only a few countries that have copied this method of transfer, as it's much better than paypal. Anyways, I'm starting to stray from the topic. iDeal, I don't know why the US doesn't has it.