Ok the 40 GB will have no media card readers, no backward compatibility, 20 gb less of storage and 2 USB ports instead of 4. It still has Wi fi and HDMI. Blu Ray is pretty necessary for games because games are needing a lot more storage and it is very hard to fit all that onto a DVD. I hear the makers of Assassin's Creed are having trouble fitting the game onto a DVD for the 360. And also the Grand Theft Auto after GTA4 is probably going to be PS3 exclusive because they will probably never be able to fit it onto a DVD.