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. 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.







