Charging users as they access services, rather than in one up-front purchase fee, could "take some of the pressure off of the purely licensed model of software," Craig Mundie, Microsoft's research head, said in an interview.

Microsoft launched trials of pay-as-you-go services in countries including India and China in 2006. Its FlexGo technology monitors user time on equipped PCs and asks for payment when a prepaid balance runs out.

Allowing incremental payment or rentals for software lowers its initial purchase cost, making users with low savings more likely to buy legitimate versions, Mundie said.

Mundie, speaking in Beijing, said intellectual-property laws and enforcement had improved in China.

But pirated Microsoft programs remain widely available at vendor stalls around the country, and Microsoft provoked rage in China last year when an automatic update to Windows XP turned users' screens black if they were running a pirated version of the OS.

Mundie also said the economic downturn will not affect Microsoft's investment in research or hiring for its Beijing lab.

"Microsoft will sacrifice other activities in order to be able to sustain our research and development," Mundie told Chinese university students at a speech following the interview.

More than 10 new graduates will join the lab's staff of over 200 this year, said Hsiao-Wuen Hon, the lab's head, at the event.