Microsoft 365 Personal and Family Subscriptions Get AI Features with Price Increase

Microsoft 365 Apps Get AI Features and Price Hike

Microsoft is integrating its AI assistant, Copilot, into all Microsoft 365 Personal and Family subscriptions, bringing enhanced AI capabilities to apps like Word, Excel, PowerPoint, OneNote, and Outlook. This significant update, which includes a price increase of at least 30%, aims to provide users with AI-powered assistance for tasks such as document writing, spreadsheet analysis, email summarization, and presentation creation. Additionally, subscribers will gain access to the Microsoft Designer app, which can generate images from text prompts and edit existing photos.

Key Features and Rollout

Copilot Integration: A new Copilot button will appear in Office apps, opening a prompt pane for AI assistance.
Microsoft Designer: Subscribers will receive access to this AI-powered app for image generation and editing.
Global Rollout: The features are rolling out globally following months of testing in various countries.
AI Credits: Each subscriber will receive 60 AI credits per month for use with Copilot and Microsoft Designer.

Pricing and Subscription Changes

Microsoft 365 Family: The monthly price will increase from $10 to $13 (a 30% rise), and the annual subscription will go from $100 to $130.
Microsoft 365 Personal: The monthly price will increase from $7 to $10 (nearly a 43% rise), and the annual subscription will go from $70 to $100.
First Price Increase: These are the first price adjustments for the consumer-focused Microsoft 365 subscriptions since their introduction in 2013.
Effective Date: New pricing will take effect at the next renewal period.

Platform Availability and User Control

Cross-Platform Access: AI features will be available on all supported platforms, including iPhones.
Opt-Out Options: Users can disable or enable Copilot within apps like Word, Excel, and PowerPoint. This feature is expected to be available via a checkbox in February 2025.
Connected Experiences: In the absence of the direct Copilot toggle, users can hide the Copilot button or disable "connected experiences" which include features like suggested replies in Outlook and the Microsoft Editor add-in.
Classic Plans: Existing subscribers can opt out of the AI-enhanced features and maintain current pricing by switching to a "Personal Classic" or "Family Classic" plan. However, these plans are limited and may not always be available.

User Feedback and Future Implications

Initial feedback from test markets has been largely negative, with many users expressing dissatisfaction with the price increase and considering cancellations. Microsoft acknowledges the potential for AI assistance to be unwanted in certain scenarios, such as academic settings, and is implementing user controls to address this. The company is likely analyzing subscriber data to predict the impact of these changes on retention and revenue.

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Image: A screenshot of the Microsoft 365 Copilot pop-up window on an iPhone, showcasing the AI features. (Source: Ed Bott/ZDNET)

Image: A general image representing Microsoft Office applications with AI integration. (Source: GERARD JULIEN/Getty Images)