Update MSI package via Wix bootstrapper - wix

Question

I have wix bootstapper which includes 4 components: tree exe packages and one msi package. I want to do major update of msi package using bootstrapper below (only main code):
<Bundle Name="$(var.Name)" Version="$(var.Version)" Manufacturer="$(var.Manufacture)" UpgradeCode="$(var.UpgradCode)" Copyright="$(var.Copyright)">
....
<Chain>
<!-- TODO: Define the list of chained packages. -->
<PackageGroupRef Id="NetFx4Full"/>
<PackageGroupRef Id="PostgreSQL"/>
<PackageGroupRef Id="AdobeReader"/>
<PackageGroupRef Id="Application"/>
</Chain>
....
<PackageGroup Id="Application">
<MsiPackage Id="MyApplication"
SourceFile=".\MSI_File\application.msi"
DisplayInternalUI="yes"
Permanent="no"
Vital="yes"
Visible="no"/>
others packages...
</PackageGroup>
and msi code:
<Product Id="*"
Name="$(var.Name)"
Language="$(var.InstallerLanguage)"
Version="$(var.Version)"
UpgradeCode="$(var.UpgradeCode)"
Manufacturer="$(var.Manufacture)">
<Package Description="$(var.PackageDescritpion)"
InstallerVersion="200"
Compressed="yes"
InstallScope="perMachine"
InstallPrivileges="elevated"
Platform="x64"/>
<Media Id="1" Cabinet="contents.cab" EmbedCab="yes" CompressionLevel="high"/>
<Directory Id="TARGETDIR" Name="SourceDir">
</Directory>
<Feature Id="Complete"
Level="1"
ConfigurableDirectory="INSTALLDIR">
<ComponentRef Id="Licence"/>
<ComponentRef Id="StartMenuFoldersComponent"/>
<ComponentRef Id="DatabaseConfigFolder"/>
<ComponentGroupRef Id="BinaryFileGroup"/>
<ComponentGroupRef Id="DatabaseConfigFileGroup"/>
<ComponentRef Id="ApplicationConfigFolder"/>
<ComponentRef Id="RemoveFolderOnUninstall"/>
</Feature>
<!-- Custom actions-->
.....
<InstallExecuteSequence>
<RemoveExistingProducts After="InstallValidate"/>
<!--Other custom actions-->
......
</InstallExecuteSequence>
To build my update msi and bootstrapp I set greater (the same for msi and bootstrapp) product version, for example old version has 1.0.0.0 and newer has 1.0.1.0. Upgrade code as a WIX documentation says remains unchanged. After run my update installer the new version of msi is not installig, in install directory still are old files. Does anyone know what I do wrong?
#Edit
Also I tried by adding MajorUpgrade element but after that bootstrapper doesn't start MSI:
<Media Id="1" Cabinet="contents.cab" EmbedCab="yes" CompressionLevel="high"/>
<MajorUpgrade Schedule="afterInstallInitialize" DowngradeErrorMessage="A later version of [ProductName] is already installed. Setup will now exit."/>
<Directory Id="TARGETDIR" Name="SourceDir"/>
#Edit
Bootstrapper logs: http://wklej.to/Msczq

Answer 1

You need to add upgrade information to the .msi package. See http://wixtoolset.org/documentation/manual/v3/howtos/updates/major_upgrade.html for use of the MajorUpgrade element.