Software giant Microsoft yesterday announced plans to reduce the retail price of its Windows and Office products by as much as nearly 60 percent in China, hoping to win customers from pirate software dealers.

Microsoft said it would cut the price of its Windows XP Home Edition from 960 yuan to 399 yuan in the next 12 months. The retail price of Microsoft Office 2007 software will also be cut from 699 yuan to 398 yuan.

Having entered the Chinese market in 1992, Microsoft's sales revenue in the country has long been sluggish due to pirated software.

Although the company has successfully convinced government agencies and computer venders in China to adopt genuine software in recent years, pirated software still prevails among individual consumers.

Critics said it is Microsoft's high pricing that forced many Chinese users to turn to pirated software. Windows XP home edition was sold at 1,498 yuan in China last year, loosely equivalent to the average monthly income of city dwellers in Beijing.

As a test, Microsoft launched a promotional campaign in October in which the company reduced the price of its Office 2007 software (which could only be installed on a single computer) from 699 to 199 yuan during the weeklong National Day holiday.

The campaign turned out to be a great success as actual sales were 10 times better than earlier estimates, according to Wang Jianhua, president of Beijing Federal Software, one of China's largest genuine software retail chains.

Wei said Microsoft would extend the October promotion campaign to the upcoming Spring Festival.