Update: Sony has clarified that the price cut stems from Blockbluster itself, not Sony.

Original Story: Sony will be dropping the price of the discontinued 40GB PlayStation 3 hardware to $360 this weekend--a $40 cut--retailer Blockbluster has confirmed with Kotaku.

Back at E3, Sony announced that it would soon replace the formerly $400 40GB PS3 with a model that packed an 80GB HDD and the same functionality for the same price. Compared to the $500 model, the $400 PS3 only has two USB ports and is not backwards compatible with PlayStation 2 games.

As Sony has repeatedly vowed that it does not plan to drop the PS3's price this year, it is presumed that this cut is merely an effort to clear shelf space before the new model hits.

The company has also announced plans to replace the existing $500 80GB PlayStation 3 with a $500 160GB version in November, which will likely prompt another round of temporary price reductions as retailers clear out the previous model.

Along with larger hard drives, the revised PlayStation 3 SKUs will pack the updated DualShock 3 controllers instead of the vibration-less Sixaxis controllers.