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Microsoft is adding artificial intelligence tools to its consumer Microsoft 365 bundle and bumping up the price in the U.S. for the first time since introducing subscriptions 12 years ago.
In a blog post Thursday, Microsoft said it’s bringing its Copilot AI assistant into the Word, Excel, PowerPoint, Outlook and OneNote applications for consumers who have the Microsoft 365 suite.
The increase of $3 per month is meant “to reflect the extensive subscription benefits that we’ve added over the past 12 years and enable us to deliver new innovations for years to come,” Bryan Rognier, vice president of Microsoft 365 Consumer, wrote in the post.
Microsoft 365 Personal will now cost $9.99 per month and $99.99 per year, up from $6.99 per month and $69.99 per year. The Microsoft 365 Family plan, which serves up to six people, will cost $12.99 per month and $129.99 per year, up from $9.99 a month and $99.99 per year.
Microsoft had 84.4 million consumer subscribers to Microsoft 365 in the September quarter, up 10%. Existing customers will see the new prices upon renewal, according to the blog post.
Formerly known as Office 365, Microsoft 365 is important to the company’s efforts to compete with Google’s productivity tools in the consumer market. But sales to businesses are far more lucrative for Microsoft.
Microsoft 365 commercial products and cloud services represented 31% of the company’s fiscal third-quarter revenue, while Microsoft 365 consumer products and cloud services contributed less than 3%. In 2022, Microsoft increased prices of commercial Microsoft 365 subscriptions for the first time.
In addition to bringing Copilot into the Microsoft 365 applications, consumer subscribers will gain access to Microsoft Designer, an AI image editing tool.
Microsoft said that, for a limited time, existing subscribers can switch to plans without Copilot or other AI.
“These plans will continue to be maintained as they exist today, but for certain new innovations and features you’ll need a Microsoft 365 Personal and Family subscription,” the company said.
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