Microsoft raises consumer office subscriptions 30% to $130 a year

Microsoft Corp. is raising the price of its Office suite of consumer apps, betting that subscribers will be willing to spend more money to access new artificial intelligence tools.

A Microsoft 365 family subscription, which provides access to Word, Excel and other apps for up to six people, will now cost $130 a year, a 30% increase, the company said in a blog post on Thursday. The personal version is increasing 43% to $100. The price change is effective immediately for new subscribers and will affect existing subscribers when they renew.

The increase is an effort to squeeze more revenue from the company’s existing customer base and help justify the tens of billions of dollars the company spends to develop and operate expensive AI services .

The spokesman said this was the first price increase for the software package – which launched as Office 365, but is now known as 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, the company’s vice president, said in the blog post.

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Rognier said the company has also made “countless improvements” to core Office applications and introduced services such as anti-virus protection and image and video editing tools.

The Redmond, Washington-based company, in partnership with startup OpenAI, is equipping its product line with AI tools capable of analyzing documents and generating text and images.

Microsoft has been testing price increases in recent months in Australia, Singapore and select other markets in Southeast Asia. The broader rollout announced Thursday will bring AI tools to most of Microsoft’s 84 million consumer subscribers, Rognier said.

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