How Does Microsoft Plan on Making Money after giving Windows 10 update for free?

Yes, Microsoft is losing upgrade revenue, people won’t pay to upgrade Windows 7 and 8.1 PCs to Windows 10. but

Microsoft still plans on charging for Windows licenses. When you buy a new PC, the manufacturer will still have to pay Microsoft for that license. If you build your own PC, you’ll need to pay $119 for a Windows license. Businesses will still need to pay for volume licenses — Enterprise versions of Windows 7 and 8.1 don’t get the free upgrade offer.

Windows 10 includes many of Microsoft’s applications and services. Windows 10 itself isn’t a service, but it does encourage you to pay for other things, including:

·         Windows Store Apps: Windows 10 includes the Windows Store, which sells a variety of apps. Windows 10 will expand the Windows Store to include desktop apps and allow developers to easily port iPad apps and Android apps to Windows. Even new “universal apps” now run in windows on the desktop and are more appealing than they were on Windows 8.

·         In-App Purchases: Apps from the store can include micro-transactions, also known as in-app purchases. Candy Crush Saga will even be automatically installed on Windows 10. Every time a Windows user pays for a Candy Crush micro-transaction, Microsoft will get a cut.

·         Digital Music and Videos: The Windows Store also allows you to purchase digital copies of songs, movies, and TV shows — just like iTunes. Microsoft makes some money if you buy media through their store.

·         OneDrive Storage: OneDrive is integrated into File Explorer out of the box, and Microsoft sells more OneDrive space for a monthly fee. It’s like Dropbox, Google Drive, and other similar services — but integrated directly into Windows.

·         Xbox Music Streaming: Microsoft sells an “Xbox music pass” that allows you to listen to all the music you want for a monthly fee — it’s sort of like Spotify, Apple Music, Rdio, or Google Play Music. Despite the name, this works in the Music app on Windows 10 as well as other devices, from Android to iPhone. You don’t need an Xbox.

·         Microsoft Office: Windows 10 will have a shortcut to quickly get the desktop version of Microsoft Office, and Microsoft sells an Office 365 subscription as well as boxed copies of this.

·         Skype: Windows 10 will include a shortcut to quickly get the desktop version of Skype, and Microsoft will sell you Skype minutes so you can call landline phones and cell phones from your PC.

Microsoft will probably add other services over time, too. Reports suggest “Microsoft Wi-Fi” will be an expanded and rebranded version of Skype Wi-Fi, allowing you to get online at Wi-Fi hotspots around the world with a simple payment system. The free upgrade allows Microsoft to get these services in front of many, many more Windows users all at once.

Microsoft also benefits from pulling you into their Windows ecosystem. If you like Windows 10, you might get a Windows phone to run those same “universal apps” or even just choose Microsoft’s apps on your iPhone or Android phone. You might buy a Windows tablet or PC instead of a Mac, iPad, Android tablet, or Chromebook. You might choose an Xbox One over a PlayStation 4. If you don’t like your current Windows 8.1 system so much, Microsoft is betting you’ll like Windows 10 more and that will make you happy and more likely to continue purchasing Microsoft products in the future.