Originally Posted by newtekie1
They are still building off of cost of developing Vista, which I doubt they have even made up in the 3 years Vista has been out. Add to that the price of continuing development.
Since Win7 is replacing Vista, having the same price points isn't too bad. I assume most people moving from Vista will just by the much cheaper upgrade versions of Win7.
From my understanding microsoft is moving to release a new os every 3 or so years, instead of the longer release cycle of xp>vista which was 6 years. By doing this they can slowly implement significant changes in the OS requiring new driver and hardware designs, preventing the big shock some companies suffered with xp>vista such as creative who suddenly had to re-design their audio drivers for a completely different model.
In terms of sales if microsoft release a new os twice as fast as xp>vista (for the sake of argument, it will probably be a 4 year cycle, so not exactly twice as fast). They have half the man hour costs if they had the same size development team, if they cut the cost of the OS upgrades in half compared to before then they have halved their margins, however because they release twice as fast then over 2 releases they get the same profit margins as one large, slow release but their income has been more regular, combined with the fact that average joe will buy a new os upgrade if it's half the cost of a vista upgrade as that's not too much money (vista upgrade costs £75ish in a rip-off brick and mortar store, if it cost £40ish then a lot more people would buy it who normally would not shell out £75 on their current pc), so people who would not have upgraded due to high costs every 6 years will have upgraded twice (once every 3 years) at half the cost at the time so microsoft will have possibly made more money.
Sorry for the long post, final point i promise, the new faster release cycles also allows microsoft to gradularly increase hardware requirements for their os and allows them to become more agile in their development, allowing them to make arcitectural changes to the os a lot faster (certain arcitecture changes can't be put into service packs as they could break some large corporate customers' setups) so putting the changes in a new OS allows microsoft to add the changes more rapidly to peole who will gain from the change, whilst allowing customers who need more time to adjust to the new arcitecture to use the slightly older os while they adjust their setup accordingly.