The Microsoft 365 Personal and Family plans are going up in price, in part because they now include Copilot AI features. Existing subscribers can opt out if they are on recurring billing.
Microsoft announced today that Copilot AI features are now included in Microsoft 365 plans, across both single-user (‘Personal’) and family plans. That includes summarizing, writing, and outlining features in Word, Outlook, PowerPoint, and OneNote, as well as asking questions about the current document in the Copilot sidebar. These features started showing up in 2023, and more have been added over time, but they required the separate Copilot Pro subscription or a compatible organization-managed account.
Before now, you could avoid the AI features in the Microsoft 365 apps by simply not signing up for Copilot Pro, or by using the one-time purchase version of Office. Now that it’s bundled, Microsoft is adding a new setting to turn off Copilot features when needed. The company is also saying again that your prompts, responses, and file contents are not used to train AI models.
Microsoft 365 plans are also going up in price. That makes the individual Microsoft 365 Personal plan $100/year or $10/month, up from $70/yr or $7/mo. The Microsoft 365 Family plan is now $130/yr or $13/mo, up from $100/yr or $9/mo. However, existing subscribers with recurring billing enabled can switch to the new Personal Classic or Family Classic plans. The cheaper Microsoft 365 Basic plan with 100GB storage and no desktop Office apps is also an option for $2/mo or $20/yr.
Microsoft isn’t even promising unlimited AI feature usage for the price increase. The AI features use up your monthly allotment of ‘AI Credits,’ which is shared across all apps on the current Microsoft account, including the text and image editing in Windows apps like Notepad and Paint. Microsoft says, “the monthly allotment should be enough for most subscribers,” and you’ll have to pay for Copilot Pro if you need more.
It sure seems like this is Microsoft making everyone pay more for AI features that many people don’t care about. Copilot Pro worked well enough as an add-on for the people who needed that functionality, but it’s probably more profitable for Microsoft to bundle it with the more popular base subscriptions while increasing prices. That’s a strategy we’ve seen over and over again with Amazon Prime, which now includes everything from free shipping to discounts on fuel at gas stations, so every price increase can be answered with “but you get so many benefits!”. If you never end up using the AI features, then that’s even better, because Microsoft gets more profit from your subscription. Google is also pulling the same move with Workspace and its Gemini AI features, but that’s limited to organization-owned accounts for now.
To play devil’s advocate, this is the first time Microsoft has increased prices since the home version of Office 365 was released in 2013. The original $100/year price for the personal plan adjusted for inflation would be around $134/yr, so the plans are still under the cost of inflation. You can also still buy the Office apps without a subscription or cloud storage, or get the Microsoft 365 Basic plan with 100GB cloud storage and no Office apps.
No one likes price increases, and using AI features with questionable utility as the main selling point probably isn’t helping. Still, there are other plan options you can check out, or just switch to free office suites like LibreOffice and Apple’s iWork.
Source: Microsoft
