Taiwanese news site United Daily News reports that, according to one source, Microsoft is charging Original Equipment Manufacturers (OEMs) significantly more for Windows licensing fees this year than in previous years (via Wccftech). These are the fees that PC makers, for instance, must pay to Microsoft to package their machines with the operating system.
UDN says (via machine translation): “A PC brand executive stated that Microsoft increases licensing fees for Windows OEMs every year. In the past, licensing fees mostly increased by single digits each year, but starting in July this year, the average increase has reached 7% to 10%, which is a significant increase compared to previous years.”
I can’t confirm whether UDN’s source is correct, but given Framework recently said it’s seen an increase in Windows license costs, I have no reason to doubt it.
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Apparently Microsoft charges OEMs more for Windows licenses if they’re used with higher-end CPUs—which seems like a strange decision to me given it shouldn’t actually change anything about the operating system being delivered, but I’m not a business bigwig so what do I know?
I don’t need to tell anyone that things are already expensive right now, and not looking to get any better any time soon. That’s primarily on the physical hardware side of things, though, thanks to the global memory shortage. In fact, I recently did the math and discovered just how bad of a picture is painted by comparing RAM prices from 2007 to today. And some who are in the know predict memory supply might be constrained “even beyond 2030.”
We’d not heard much in the way of software prices rising, though. Software—and some specific kinds of hardware such as monitors—have been somewhat of a last bastion for pre-AI-induced-shortage prices. Alas, it seems Microsoft might not be content allowing memory companies to have all the fun.
7–10% might not seem a lot, but it all compounds on top of an already expensive market. OEMs are unlikely to eat the costs, so eventually such price hikes could hit end-consumers like us. And while we might be able to select OS-less systems at checkout, OEMs could increase prices across the board regardless if their margins keep getting slimmer.
Microsoft in general doesn’t seem to be struggling, either. Despite its Xbox division performing worse than last year, the company’s overall revenue is actually up by 18%, comparing the previous quarter to the same quarter last year.
That being said, the company has also lost exclusivity with OpenAI, meaning the AI company can now use cloud hosting other than Microsoft Azure, after a few years of being restricted only to those servers for training and hosting. That close partnership was part of what ushered in the ‘Copilot’ AI PC era. The partnership still exists, but OpenAI isn’t as closely tied to Microsoft.
Still, Microsoft seems to be doing just fine, so it’s difficult not to be a little frustrated that the company is potentially adding on to the cost of PCs. Is that someone saying ‘the year of Linux’ I hear?
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