In Australia, Vista Ultimate (full edition), previously selling for A$751, is now $302 cheaper at $449. Other full-edition prices, with the old in brackets are: Home Basic $299 ($385); Premium $349 ($455); and Business $449 ($565). There are similar cuts for upgrades, which now cost from $149-399, compared with $199-495.
The move comes one year after Vista was launched in Australia and the software giant hopes that the new prices will turn customers who had complained about pre-installed Vista PCs, which some downgraded to Windows XP.
However, Microsoft denies the major reductions are specifically targeting those users.
"Windows Vista has been on the market for more than a year now and has been doing well, with more than 100 million licences sold in its first year," a company spokesman said.