The latter would violate Microsoft's standing policy of shutting down retail sales of the preceding edition a year after the launch of a successor, but it might be worthwhile to backpedal to squeeze some money out of the XP situation without facing the backlash when customers complain that they're being pushed to adopt the radically-changed Windows 8.1.
Some revenue, in other words, would be better than no revenue, even if Microsoft had to eat crow and offer Windows 7 as an option.
Combine one or more of the above
Microsoft could get creative and blend one or more promotions. A combination of a pay-for-patches program with a discounted upgrade would, for instance, let Microsoft charge more, say $100, and effective "hide" a higher price for the patches in the total. A blended deal like that could also come with a definitive end to patching, even for a price, with Microsoft pledging to provide security updates for only one year, at which time the user would be expected to apply the Windows 7 or Windows 8 upgrade.
Microsoft may believe that none of the above are called for. One possible rationale for that thought: It's unlikely that any would have a significant impact in China, where an estimated 72% of all personal computers run Windows XP, or other emerging markets where cash is tight.
The standard thinking is that the bulk of those Chinese PCs are running a pirated copy of XP, and because of that, as well as lower consumer incomes there and in similar markets, any program that comes with extra fees would be dismissed out of hand.
Giving away patches for a longer period might help stifle exploits of XP PCs in China, for example — and thus indirectly protect the global Windows ecosystem — but even then, Microsoft may see no point in being generous. Most security experts believe few Chinese PC owners download and install patches, even though they can, because of their heavy reliance on pirated operating systems and an accompanying distrust of updates that they assume will sniff out the counterfeit and render it useless.
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