Microsoft Raises Consumer Office Subscription 30% to $130 a Year

(Bloomberg) — Microsoft Corp. is raising the price of its package of Office apps for consumers, a bet that subscribers will be willing to cough up more for access to new artificial intelligence tools.

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The Microsoft 365 family subscription, which offers access to Word, Excel and other apps for as many as six people, will now cost $130 a year, a 30% increase, the company said in a blog post Thursday. The version for individuals is rising 43% to $100. The price changes take effect immediately for new subscribers and will affect existing ones when they renew.

The increase is an attempt to wring more revenue from the company’s existing customer base and help justify the tens of billions of dollars it’s spending to develop and operate pricey AI services.

A spokesperson said it was the first price increase for the software bundle – launched as Office 365, but now called Microsoft 365 — in 12 years. “These changes bring the transformative power of AI to the personal productivity tools that millions of people use every day,” Bryan Rognier, a company vice president, said in the blog post.

Rognier said the company has also made “countless enhancements” to the core Office apps and introduced such services as antivirus protection and image- and video-editing tools.

The Redmond, Washington-based company, which has partnered with startup OpenAI, is infusing its product lineup with AI tools capable of analyzing documents and generating text and images.

Microsoft tested the price hikes in recent months in Australia, Singapore and other select Southeast Asian markets. The broader rollout announced on Thursday brings the AI tools to most of Microsoft’s 84 million consumer subscribers, Rognier said.

–With assistance from Dina Bass.