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they definitely wanted whatever format was inside PS3 to fail (which is bluray). HD DVD wasn't a threat to MS and their view, but they had to prevent bd from skyrocketing in popularity so they used HD DVD to prevent or delay that to happen.

And Michael Bay is either the dumbest guy or the hugest bluray/sony fanboy. Before mid-2008, HD DVD was the superior format. It's only when blu-ray finally matured 2 years after launch that the scale tips on the bluray side because of the superior storage, otherwise, everything blu-ray did, HD DVD can do because it's all about encoding.