Microsoft Tests M365 Price Hikes Up to 45% in Asia, Prompting Backlash
Microsoft has announced significant price increases for its Microsoft 365 (M365) subscriptions in six Asian countries—Australia, New Zealand, Malaysia, Singapore, Taiwan, and Thailand. The hikes, reaching up to 45%, are said to support the rollout of advanced artificial intelligence (AI) features in the productivity suite.
Emails sent to subscribers recently unveiled these changes, which will affect renewals. For example, the annual M365 Family subscription in Australia will rise from AU$139 to AU$179 (roughly $85.50 to $110), marking a nearly 29% increase. Meanwhile, the Personal plan will climb from AU$109 to AU$159 (about $67 to $98), an increase of nearly 46%. According to Microsoft, these adjustments reflect the added value of features like Microsoft Defender, creative tools such as Clipchamp, and AI-driven services including Microsoft Copilot and Microsoft Designer.
Alternative Options and User Reactions
The price increase isn’t mandatory, as Microsoft offers a cheaper alternative without CoPilot, referred to as “M365 Classic.” However, this option has been criticized for being difficult to access, as it only appears during the subscription cancellation process. Efforts to find more details about the Classic plan online have proven unsuccessful, leading to further frustration among subscribers.
Initial reactions to the price changes have been overwhelmingly negative. Many users accuse Microsoft of price gouging, with Australian customers particularly vocal due to the already high cost of living in the region. Critics have also pointed out that similar AI features are offered for free by rival providers.
Investment in AI and Future Implications
Microsoft justifies the price hikes as necessary to keep its customers at the forefront of cutting-edge AI capabilities. The company plans to invest $80 billion in datacenters in 2025 to support its growing AI operations, which include services integrated into the M365 suite.
While the price increases are currently confined to the six mentioned countries, Microsoft has not ruled out the possibility of extending them to other regions or applying them to corporate licenses. A spokesperson explained that these changes allow the company to “listen, learn, and improve” based on customer feedback.
The move to test pricing strategies in select countries is a common practice among tech vendors, especially in regions with varying levels of economic prosperity and technological adoption. However, whether the insights gained from this trial will inform global pricing decisions remains unclear.
For now, the backlash suggests that Microsoft may face challenges convincing customers that the added AI features justify the steep price increases.
