In the war against software piracy, it seems that the rule is: If you can’t beat ‘em, lower the price to almost nothing and hope to make at least a little bit of money. Such is the case in China, where last year’s software piracy rate was over 80% according to the Financial Times. In the hopes of actually selling some stuff over there, Microsoft has lowered the price of Office Home and Student 2007 to the equivalent of $29 – more than 70% off of the previous MSRP.
It appears to be working, too, as retailers stocked up on about a half-year’s worth of inventory for the new promotion and have “run out faster than they had expected.” This all begs the question, though: What kind of message does this send? Pirate enough software and the legit versions will eventually become affordable?
Many software developers would argue that software is expensive because of piracy. If all software was sold at a 70% discount, though, would piracy go way, way down and would revenues actually go up? I don’t make a habit of pirating software but I do know that I’d buy and play a lot more games if they all cost $10-20 instead of $40-50.
This is a good test case. It’ll be interesting to see if Microsoft makes more money in China selling a lot of Office 2007 copies at $29 than it did selling a handful at $99.