Making basic versions of Word, Excel, and Powerpoint free is not a bad idea; it won't cost Microsoft much money. Traditionally, Microsoft has made their money from people (particularly enterprises) buying the full office-suite, not just the basics people use for school and the like. Considering the wealth of free options, charging $50 for the basic version is quickly becoming unsustainable, as people will migrate to the likes of Google Docs. Having free versions while Microsoft Office is still the well known name ensures that people use it at home, and learn on it, driving enterprise sales. It also helps with overall sales of the OS, if only slightly, and with the Universal Apps Model, Microsoft can make money in the same way Google and Apple do: slight cuts of every app sold. As the market grows and steam machines present a valid competitor, it may even become more profitable than windows sales themselves, and force Microsoft to make at least the basic version of the OS completely free of charge.