Preferring devices that people actually buy, retailer yanks Microsoft’s Zune

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The Zune, Microsoft‘s answer to the iPod, has faced an uphill battle since its introduction in November 2006. Apple dominates with about 70% of the portable media player market (Microsoft has sold 2 million Zunes to date; Apple sold 10 million iPods last quarter). But hey, that’s no reason not to try, right? Microsoft and other iPod competitors pray there is room for many devices, especially if they can offer something different than the iPod and get their message out.

That will be a tad harder now for the software giant despite its marketing muscle. Video game retailer GameStop said today that it would no longer stock Zunes in its more than 5,000 stores worldwide because ‘it just did not have the appeal we had anticipated.’ It’s hard to know how many of the Zunes sold so far came through GameStop, a store primarily for game lovers. But it is never good news to lose a retail outlet.

It’s not like Microsoft isn’t trying. The company announced this month that it was beefing up its online entertainment store, called Zune Marketplace, to start selling popular TV shows such as ‘The Office’ and ’30 Rock.’ The shows can be downloaded and watched on a Zune or a computer, and also played through Microsoft’s Xbox 360 game console, which connects to the television. Microsoft figured it had something going for it: it was going to offer some NBC shows that aren’t for sale at iTunes because of a rift over pricing between NBC Universal and Apple.

It’s not clear that dangling ‘The Office’ will cause people to buy Zunes. But even it it would, having the media player on fewer store shelves makes Microsoft’s job tougher.

-- Michelle Quinn