Microsoft raises the Windows 8 Pro upgrade price to $200, but ignores loophole that lets you buy it for $15
Exactly two weeks ago, Microsoft announced that it would be increasing the price of the Windows 8 Pro upgrade to $200, a 400 percent price hike from the previous $40, as of February 1.
Context & Ripple Effects
The $40 upgrade was always a launch promotion sitting on top of a planned list price: Microsoft had already signaled back in August 2012 that Windows 8 Pro would settle at $199 once the introductory window closed, and October's packaging and pricing breakdown confirmed the tiered structure around it. February 1 is simply the day the discount expires.
The timing is awkward. Windows 8 has reached just 2.36% market share, Windows 7 is losing share for the first time since release, and Microsoft's own Q2 results showed the PC market failing to respond to the launch — while enterprise products like System Center and SQL Server carried the quarter. Leaving the $15 loophole open softens the blow, but also undercuts the very price increase it accompanies.
First-order effects
- Consumers upgrading an existing PC from today pay $200 instead of $40 — a 400% jump — unless they route through the unpatched $15 loophole, which Microsoft has left functional despite announcing the hike two weeks in advance.
- Buyers weighing a cheap upgrade against a new machine now face a much narrower gap in the other direction: the $200 upgrade price pushes fence-sitters toward new hardware, where Windows 8 Pro is bundled.
Second-order effects
- OEMs become the relative winners: with upgrades repriced at list, Microsoft's economics favor selling Windows through new PCs over servicing the installed base — consistent with the failed attempt to ignite PC sales reported in late January.
- The surviving loophole effectively creates a two-tier market where informed buyers pay $15 and everyone else pays $200, inviting tech-savvy customers to treat the official price as negotiable and pressuring Microsoft to either close it or quietly extend the discount.
Third-order effects
- With consumer upgrade revenue proving unreliable and enterprise licensing (System Center, SQL Server, Lync) propping up results, Microsoft's pricing posture points toward treating Windows as hardware-bundled and enterprise-sold rather than a retail product in its own right.
- If promotional-to-list transitions like this one keep landing during weak adoption phases, Microsoft risks training its installed base to wait out every discount cycle — a structural drag on any future paid-upgrade push.
The trend: Microsoft is normalizing Windows pricing off its launch promotions even as consumer adoption lags, shifting the burden of Windows revenue toward OEM bundles and enterprise licensing.