The Microsoft, MSFT, 365 family subscription, with Word, Excel and other apps, will now cost $130 a year

Microsoft Corp. has announced a price hike for its Office apps subscription plans, betting that consumers will pay more for access to new artificial intelligence tools.

The Microsoft 365 Family plan, which supports up to six users and includes apps like Word and Excel, will now cost $130 annually—a 30% increase, according to a blog post from the company on Thursday. The Individual plan is also rising 43% to $100 per year. The new pricing applies immediately to new subscribers and will take effect for existing customers upon renewal.

The price increase reflects Microsoft’s push to boost revenue from its current user base while justifying its substantial investment in developing and maintaining advanced AI services. The company, based in Redmond, Washington, has partnered with OpenAI and is integrating AI tools into its product suite. These tools can analyze documents and generate text and images, adding new capabilities to its core apps.

According to a spokesperson, this is the first price adjustment in 12 years for the subscription package, previously known as Office 365 but now rebranded as Microsoft 365. "These changes bring the transformative power of AI to the personal productivity tools that millions rely on daily," said Bryan Rognier, a Microsoft vice president, in the blog post.

Rognier also highlighted the "countless enhancements" made to the core Office apps over the years, alongside new features such as antivirus protection and image- and video-editing tools.

Microsoft tested the price increases in markets like Australia, Singapore, and Southeast Asia earlier this year, where the changes sparked controversy.

“It’s incredibly frustrating, and I’m honestly thinking about canceling and switching to Google Docs,” said Daniel Burke, an independent game developer in Australia.

Burke and others who tried to cancel their subscriptions found an option called Microsoft 365 Classic, previously hidden, which allowed them to keep their subscriptions at the old price—minus the AI features.

Microsoft spokespeople explained that the limited trial helped the company “listen, learn, and improve,” a sentiment echoed by Rognier in the announcement. Customers affected by the price hike will have the option to downgrade to a web- and mobile-based variant called Basic or, for a "limited time," access versions of the apps under the Classic brand. Neither option includes AI tools.

“Companies like Microsoft have poured so much money into AI that they’re now forcing it on users,” said Kate Littlejohn, a teacher and university tutor in Australia who relies on Office apps for work. “I’m glad I found a way to opt out, but it shouldn’t be this difficult.”