It’s a mix of things. Individual users who were previously limited to 1TB now get double the storage for gaming, and anyone sharing with just one other person doesn’t face much of a difference. But if your account was split between three or more users, it’s a big downgrade.
What hurts the most is that Microsoft is not adjusting the prices of any of the plans. Microsoft 365 Family remains $12.99/month or $129.99/year, while Premium remains $19.99/month or $199.99/year. Meanwhile, Microsoft 365 Pro costs a whopping $99.99 a month with no annual option.
On this support page about the change, Microsoft makes it clear that this is an amount of shared storage: “The primary subscriber and up to five additional members get from the same shared storage pool.” However, that does not mean that access is shared between all users: “Although storage quotas are shared, files remain private.”
And you can expand the size of the storage pool with additional purchases. It doesn’t appear that individual users can increase their own individual limits, but only contribute to the shared limit: “Storage add-ons purchased by subscription members are automatically added to the shared pool. Free storage grants from eligible family members also contribute to the shared pool.”
Non-sharable plans remain unchanged: Microsoft 365 Basic gets 100 GB of storage for $1.99/month or $19.99/year, while Microsoft 365 Personal gets 1 TB of storage for $9.99/month or $99.99/year.
