Microsoft’s Price-Busting Gambit: Windows 8 Pro Will Be a $39.99 Upgrade

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We may still be waiting for Windows 8, but it’s already accomplished one thing: It’s become the most surprising version of Windows ever. Even the pricing, it turns out, is a major departure from past editions.

Microsoft’s Windows blogger, Brandon LeBlanc, just spilled the beans:

We set out to make it as easy as possible for everyone to upgrade to Windows 8. Starting at general availability, if your PC is running Windows XP, Windows Vista, or Windows 7 you will qualify to download an upgrade to Windows 8 Pro for just $39.99 in 131 markets. And if you want, you can add Windows Media Center for free through the “add features” option within Windows 8 Pro after your upgrade.

By comparison, the Windows 7 Pro upgrade is $199.99; even the less full-featured Windows 7 Home Premium one lists for $119.99. They can be found at a discount, but $39.99 is still an exceptionally cheap upgrade by Microsoft standards.

Apple pioneered this sort of low, low upgrade pricing with OS X 10.7 Lion, which went for $29.99; the upcoming Mountain Lion is just $19.9, and paying that price entitles you to install it on as many Macs as you own. (Like Apple, Microsoft is switching to direct digital distribution which lowers costs and lets it keep more of the profit–Windows 8 Pro is a $39,99 download, but the shrinkwrapped edition will be $69.99.)

[UPDATE: As Jason Rapp reminded me on Twitter, I forgot that it was actually OS X 10.6 Snow Leopard that introduced the $29.99 price]

I doubt that Microsoft is doing this for competitive reasons–if you’re excited about a cheap OS X upgrade, you most like don’t care about a cheap Windows one, and vice versa–but like Apple, the company has apparently come to the conclusion that it’s in its own interest to induce as many people as possible to make the move to the latest version of its operating system as quickly as possible.

Of course, it’s not that simple: Windows 8 is such a radical reinvention of the operating system that a lot of users are going to find it intimidating and/or unappealing no matter what the price is. At least at first, and for the foreseeable future in some cases.

But by knocking the price of Windows 8 down so low, Microsoft is betting that many people will say “Why not?” And it’s recalibrating its customers’ expectations about how much software should cost, thereby sacrificing its ability to charge $200 or more for any other mainstream Windows upgrade ever again. (The $39.99 price is good through January 31st, the company says.)

So are you more likely to try Windows 8 than you would have been if it had been a triple-digit decision?