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GameStop Drops Zune

GameStop said during an earnings call on Friday it will discontinue sales of the Microsoft Zune digital media player citing reasons that the device just wasn’t selling enough.

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.

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.

In response to the announcement, 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.

The decision to stop selling Zunes took a toll on the company’s margins in the first quarter.