A leaked Blockbuster memo reveals that it will be dropping the price of the discontinued 40GB PS3 model from $360 to $299. The 40GB model has been replaced by an $500 80GB version, which lacks two USB ports and backward compatibility with PS2 titles, but that model is also getting replaced later this year by a higher end version with a 160GB HD. SCEA has stated in the past that it would not drop the price of the PS3, so this is probably just a move to clear the old stock.