It does not work that way, Sony could not deny Microsoft anyway yes sony was one of the founder's of the first BluRay founder's which later became the BDA, but also Even though Sony has been developing Blu-Ray since 1992 Sony was not the only one who has worked on Blu-Ray just like CD format and the DVD format Many companies were in it for creating these disc based format's Sony was only one of these companies, and besides they would not do it anyway because it mean's more Blu-ray devices in the market, thus more BLUE LASER DIODE'S to be sold.

the only thing it would be is a little bit of Microsoft's pride having to support Java over Microsoft's own IHD.

which is why Most likely Microsoft would never support Blu-Ray over the fact that BDA choose the java format for control software over IHD.

which made Microsoft turn away from Blu-Ray in the first place.

1. Sony does not own BluRay. Actually BluRay needs every help it can get. Sony can't say we don't MS to use BluRay. Well they can say it but it won't matter
2. Every BluRay-player is required to support VC-1, a codec developed by Microsoft. So MS makes money with BluRay as well. Sure, just a tiny bit but anyway.
3. The Advanced Access Content System (AACS) is a standard for content distribution and digital rights management. It was developed by AS Licensing Administrator, LLC (AACS LA), a consortium that includes [...] Microsoft. (from wikipedia)

Well I don't know if MS uses BluRay in the future. It might happen it might not. But I do know that Sony is not the one to decide this. This is a MS only decision.

The chinese format based upon HD-DVD is alive and well. They would have all the cheap optical drives they could ever want and they would not have to support two laser assemblies as HD-DVD optics is compatible with DVD whereas a Blu Ray drive must maintain two laser assemblies.

Nope, look at the format winning in China.

umm HD DVD is also 2 laser assemblies, just as Blu-Ray is. also as a matter of fact HD DVD also uses the same Blue Laser that's also in Blu-Ray.

Nope. The reasons seem obvious to me. Not sure if mandatory Dig. Dist. would fly yet or ever but M$ will never pay Sony to use their system. They need an alternative to dvd fast.

umm..HD DVD is not the winning format in China. CHDVD  which is not the same as HD DVD nor is it the winning format in China, As a matter of fact Blu-Ray is also approved by the chinese govt as an official format for HD in China.

http://arstechnica.com/business/news/2009/08/homegrown-cbhd-discs-outsell-blu-ray-by-3-1-margin-in-china.ars

The link says it all.

I was wrong about the laser though.

they already have digital distribution. combined with DVD. just like they have now. Microsoft know's Blu-Ray is not getting replaced anytime soon, but also they do not see a real need for it because even when the new xbox come's out Digital distribution and DVD 9 will still be enough for Microsoft's xbox centric platform developer's. which is mainly Window's PC developer's and Since steam is ok right now for game's distribution, Most likely that is not going to change.

since most of the Developer's for the xbox platform are PC developer's and many of those same game's go to steam an the like with what they at Microsoft already have in place DVD 9 will in all likelyhood still be ok even for the next xbox.

it's still not the winner and most likely never will be:

The ultimate spread of the new format will be controlled partly by its adoption by American movie studios. Of the six major studios, only Warner Brothers is currently shipping its library on CBHD, leaving WB titles and domestic Chinese films as the only legitimate CBHD content.

this has been going on since even before last year:

http://hd.engadget.com/2008/07/28/chinas-blu-ray-competitor-cbhd-brings-hd-dvd-back-from-the-dead/

the very fact that Blu-Ray has 10% of the HD market in China say's alot.

CHDVD is just like DVD great for Pirates not so good for the studio's