So GameStop has bailed on the Zune. TheStreet.com reports that the retailer, citing insufficient demand, won't be pushing the Microsoft mp3 player anymore. Actually, it sounds like it pulled the plug back in the first quarter of the year and just now someone's noticed, because it did ding GameStop's gross margins. That and other guidance knocked 6 percent off GameStock's share price at closing yesterday.
The news sounds worse for Microsoft than Gamestop, though. It's 5,000 fewer stores through which Microsoft can grow sales of the Zune, and it whacks a natural cross-sell to Xbox gamers - who in the future might get exposed to XNA games on their console, and be interested in a portable device that plays them.