Why are products more expensive on Microsoft Store?

There has been lots of questions and follow-up buzz image about the Microsoft Store launch last week. Thanks to everyone that has taken time to contact me by email, twitter or in blog comments.

One question that has come up consistently has to do with the pricing of products as compared to other online retailers. Some of you have asked why Microsoft is charging full price for our products – I’ve even heard from some folks in the community that they see this as evidence that Microsoft is trying to gouge customers.

I just wanted to address this issue head on and let you know that nothing could be farther from the truth. As many of you know, Microsoft has a deep retail channel presence and a long history of working very closely with partners. As with most consumer products, pricing will vary from reseller to reseller but it is standard practice for direct sales from manufacturers to be priced at manufacturer’s suggested retail price (MSRP). That’s why our prices look higher.

The obvious question is why would anyone buy the same product at a higher price?

First, there are many customers who have asked for the option of buying direct from Microsoft. Microsoft Store provides them not only that choice, but also the ability to develop a relationship directly with Microsoft.

Secondly, the ability to purchase via ESD (electronic software distribution) is also very compelling to a lot of customers who want the convenience and instant gratification of instant download, ability to re-download in the future, and perpetual storage of product keys.

I hope this helps address the questions around pricing. As always, if you have questions, drop a comment or find me on twitter.