GameStop will no longer sell Microsoft’s Zune
GameStop will no longer stock or sell the Zune, citing weak sales and a poor fit with its "product mix". Despite recent the positive sales and only weeks short of Microsoft's launch of games for Zune, Microsoft's player will no longer be found at the gaming retail giant. The decision came about a month ago, and sales will continue at Gamestop.com until stock is depleted.
Adam Sohn, director of Zune marketing, confirmed the announcement: "We have a set of great retail partnerships that give Zune a strong presence at retail including Best Buy, Target, Walmart, 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. We're looking forward to a continued strong presence at retail with our partners."
The move is unlikely to affect GameStop, whose sales come almost completely from video games but it puts up another hurdle in Microsoft's attempt to grow Zune sales.
GameStop has hundreds of stores across the country and losing that distribution channel could hurt Zune sales. Many of GameStop's customers are avid users of Microsoft's Xbox 360 console and could have presented a cross-selling opportunity for Microsoft. GameStop first offered Zunes to its customers for pre-orders in Oct 2006.
Microsoft has sold about 2 million Zunes since the device's release in Nov. 2006. Zune is estimated to have about 4% of the overall market share for digital media players currently.
The decision to stop selling Zunes took a toll on the company's margins in the first quarter. Gross margins for the quarter were 26.1%, down from 27.2% the same quarter year before.
Shares of GameStop were down $3.15, or 6.2%, to $47.72 following in-line guidance for the current quarter and fiscal year.
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Labels: Game Sharing, Microsoft, Zune







