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GameStop to stop selling Zune

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Written by Rene Millman   
Monday, 26 May 2008
zune_tripleshot.jpgMicrosoft is very good at shifting operating systems, office suites and has had very good success in North America with its next-gen Xbox 360 games console. One place where it seems to be in trouble it is answer to the Apple iPod, the Zune. Now, US games retailer GameStop has announced that it is to stop selling the differently-successful mp3 player in its stores.

It cited as the main reason for ditching the player from its shops as "lack of demand". Currently the Zune has about four percent of the US market place, which would seem healthy enough but the iPod has about 70 percent of the market. It will continue to shift its remaining stock, but as businesses oft say, when its gone, its gone.

And not only that, it isn't as if GameStop is a minor retailer, it has 5,400 stores worldwide with 600 new ones opening up this year. It's also doing quite well for itself with profits recently announced at $62.1million in Q1 (Up 151 percent).

"We have decided to exit the Zune category because it just did not have the appeal we had anticipated," a GameStop spokesperson told thestreet.com business news website. "It [also] did not fit with our product mix."

But Microsoft hit back with a statement issued to the press; "We have a set of great retail partnerships that give Zune a strong presence at retail including Best Buy, Target, Wal-Mart, and others. We will continue to invest in deep retail partnerships, and have seen good momentum online and at retail over the last few months including a great response to our recent spring update."

Microsoft launched the Zune player around two years ago. It had high expectations and though the device would be an “iPod killer”. But this didn't wash with the buying public. Welcome to the Social (Outcast).

 
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