Microsoft’s Gamestop Zune Response

Last week retailer Gamestop revealed that it will stop selling Microsoft’s Zune portable media players because of what it called low demand.

"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. "It [also] did not fit with our product mix."

The company will keep Zunes in stock until its inventory is gone. But it’s left Microsoft very defensive.

"We have a set of great retail partnerships that give Zune a strong presence at retail including Best Buy, Target, Wal-Mart, and others," Adam Sohn, director of marketing for the Zune, noted in a statement. "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."

However, it’s a simple fact that the Zune, which Microsoft introduced two years ago, has really failed to make a dent in the market with just 4% of the market, as opposed to the 71% claimed by the iPod.

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