Beginning of the End for the Zune?
May 25th, 2008 by dave
TheStreet.com has an article about GameStop’s announcement that it will no longer carry the Microsoft Zune player. It cites poor sales, and lack of fit with their existing product mix.
Two interesting things that stand out for me here:
1. Microsoft has sold a total of about 2 million Zunes, or about 1 million per year. Although they managed to sell the first million in just about a year’s time, it has actually taken them longer than a year to sell the second million. In the same time, Apple has sold 150 million iPods. Ouch!
2. The fact that Microsoft has not been able to come up with a coherent (or even incoherent) cross-selling link between the Xbox 360 and the Zune should astound even first-year business majors. That should have been a no-brainer, but instead it just serves to underline Microsoft’s growing inability to execute on even something as dirt-simple as this. I mean, really, all they could think of was a Halo-themed skin for the Zune? Wow.
Here’s the cut and paste to avoid the inevitable loss of the original link:
GameStop to Stop Zune Sales
05/23/08 - 01:32 PM EDT
SAN FRANCISCO — Video-game retailer GameStop has decided to stop selling Microsoft’s Zune players at its stores due to what it sees as insufficient demand from customers.
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.
“We have decided to exit the Zune category because it just did not have the appeal we had anticipated,” said a GameStop spokesperson. “It (also) did not fit with our product mix.” GameStop made the decision about a month ago. GameStop said it will sell Zune players online until it clears out its inventory.
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.
Microsoft said Friday that the Zune continues to be carried by other big-box retailers. “We have a set of great partnerships that give Zune a strong presence at retail including Best Buy, Target, Wal-Mart and others,” said Adam Sohn, director of marketing for Zune, in a statement. “We will continue to invest in retail partnerships and have seen good momentum online and at retail over the last few months.”
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.
Zune’s total sales are a fraction of those for rival Apple’s iPod. Apple sold 10.6 million iPods in the last quarter alone.
GameStop first offered Zunes to its customers for pre-orders in Oct 2006.