Version: 2008

Comments on: Microsoft loses a Zune retailer

GameStop has stopped selling Zunes, and while I don't think this is quite the end of the road for Microsoft's MP3 player, it's hard to see a silver lining in the news.

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by htoole318 May 23, 2008 1:54 PM PDT
Not that I can comment on how the zune is doing, though my wife has one, as well as an ipod and likes them both. I would have to say i go to gamestop all the time for one thing....games, didnt even know game stop sold zunes?? Thats like saying j.c. penney isnt selling the porsche any more, must be a terrible car.....
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by jabberwolf May 23, 2008 2:24 PM PDT
Who is GameStop ??
Sorry so many vendors out there, this hardly matters at all !

And zune sales are not down, so something else happening behind the scenes.
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by tjohnson11 May 23, 2008 2:56 PM PDT
Microsoft's only real product is Windows. Everything else is losing money (Xbox, Zune, etc.). Good thing they have that to fall back on, or they would be out of business. They are so far behind Apple in both the OS market and electronics (ipod, iphone, etc) and yet people still keep buying their crap.
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by CKFisher1 May 23, 2008 3:28 PM PDT
Zune isn't their money maker that is for sure but you might be surprised that Windows isn't their biggest money maker either. It is like fourth on the list of five divisions. No doubt it has an effect on the other divisions but it isn't by itself the only real product as you say.
by 666067 May 26, 2008 10:00 AM PDT
Really? I am surprised that Office is now losing money, That all the servers are losing money, CRM, MBD, and the whole of Home and Entertainment, including Windows Mobile... You know a LOT about Microsoft, thanks for this valuable insight into their business P&L!
by LinePlanVolume May 31, 2008 1:35 PM PDT
Please stop drinking the Apple Koolaid. I'm not saying Microsoft doesn't suck, but to act like Apple is some kind of paragon of anything other than a pretty face is pretty delusional. The prices are still terribly high yet the quality of the hardware is suffering. The iphone is a joke of a "smart-phone" for nearly twice the money and the OS is far from squeaky clean. I can't justify buying any single piece of Apple hardware because the value is just not there. Why would I spend so much money when I could get something just as, or nearly as, good for much less? I've used Apple stuff every day at work for years and have had just as many headaches with it as anything else... It just looks nicer. BFD.
by CKFisher1 May 23, 2008 3:34 PM PDT
I would like to say that if they don't improve the Zune player and firmware, the Zune will fall into obscurity. I like the concept. Wifi on a music/video player. Big bright screen. Plays video great. Good battery life. Hate the player soooo much.
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by MarkinStLouis May 23, 2008 3:47 PM PDT
I don't see where the issue lies: Yeah, they may be dropping the Zune line, but, to the best of my knowledge, they have never carried ipods. I'm guessing that, if they did, they would be dropping them, too.
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by smilingassassin May 23, 2008 3:51 PM PDT
I was just checking Google ews as I headed out of town and I saw this story. I went to the Eagle Rock mall today to pick up an old copy of Jedi Starfighter for the Xbox we have in the car. I then walked about six doors down to the target and bought an 80GB Zune. I didn't even think to check if Gamestop had any Zunes.
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by oxtail01 May 23, 2008 5:39 PM PDT
This is NOT a big deal. What is the percentage of mp3 player sales at Gamestop, and I'm NOT talking about only Zune either? How much ipods or sandisk or creative mp3 players do they sell? ALMOST NOTHING! Almost all of Gamestop's earnings come from reselling USED games. They're like a small pimple on an elephant's a.. when it comes to electronic hardware sales. Just another example of CNET lacking any credible journalistic expertice. Hey, you guys just got bought out by a stodgy TV network - what does THAT say about your creds?
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by mocax May 23, 2008 9:15 PM PDT
I hate Zune and how Microsoft treat their PlaysForSure customers.
I hope Zune dies messily.
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by PostNoComments May 24, 2008 9:52 AM PDT
The problem with Microsoft strategy is that they were playing catch up to Apple from the very beginning. At the pace they're going, I'm expecting the Zune phone to come out sometime in 2010. Let's face it, Microsoft sucks at innovation. All their ideas seem to come from Apple, Google and Sony.
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by 666067 May 26, 2008 10:05 AM PDT
Using the word "All" demonstrates your complete lack of awareness of the portfolio of applications than span the three divisions of Microsoft. Show me a comprehensive unified communications story from the three companies you mention that comes close to what Microsoft is shipping right now. Show me the MOSS equivalent. Pay attention class, there is some learning you need to do before spouting silly comments that declare an absolute.
by tajna_rabota May 31, 2008 11:02 PM PDT
666067: You completely avoided the statement. The criticism was against Microsoft's lack of innovation (a very, very fair comment). You then go on about their product portfolio - totally different subject. But the two can tie in together - Bill Gates and Steve Ballmer are so obsessed with controlling every aspect of computing that they are trying to have their fingers in every single pie. Hence, their products are very, VERY mediocre. They do not devote resources to be a leader in one area, but rather, a presence in all areas. Then they try to use their OS dominance to destroy the competition in one way or another. Accordingly, I am grateful that there are companies that offer alternatives to the M$ hegemony - what surprises me (and tells me a lot about their corporate culture) is that M$ does not seem to try to respond in kind to anything. They just throw money at problems (Yahoo?)
by firefoxluva95 May 25, 2008 1:26 PM PDT
It's not a big deal. GameStop sells games, they will always sell games and accessories. If I wanted to get a Zune, I'd probably just order it online or something.

Now I can see that most of the frustration isn't the Zune itself but it's the DRM. DRM exists in the Ipod realm too. Both suck but at least Itunes and Amazon both offer DRM-free downloads, something the Zune Marketplace has yet to offer, but the time will soon come. Then the Zphone. But I'd rather see a better Windows 7 first, probably with ideas taken from Mac OS.
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by StandardsDT May 27, 2008 9:24 PM PDT
Get your facts straight. I own a Zune and the entire library of the Zune Marketplace is DRM Free MP3's. The only thing thats DRM is the monthly fee which they have to do for legal reasons. Next time do some research before talking.
by fturla May 25, 2008 11:16 PM PDT
Microsoft is dropping the ball on Zune. They lose market share for 3 reasons.
1) Compatibility - Their firmware isn't that great - the player needs to be able to play a wider variety of music and video files and as a bonus may I highly suggest be capable of storing and retrieving other forms of data.
2) Pricing is just plane stupid - You don't price an item as a Porsche or Ferrari when the market perceives the Zune as a mid priced american car. The goal of Microsoft is to market and service the Zune similar to a Toyota Camry.
3) Microsoft really does not have any consumer based retailers - sorry to be more accurate, Microsoft does not want any consumer based retailers because it does not provide them with sufficient incentive to continue marketing and selling the Zune. There is not enough or never existed continuing revenue streams for the retailers that Microsoft has provided. Microsoft has elected intentionally to keep all potential auxiliary and ancillary items pertaining to the Zune to itself, thus other revenue streams that a retail might get is lost. Such as selling music, video, and data files for the Zune as well as providing other uses for it. Please note visicalc should be Microsoft's and everyone elses dream for any product they sell. If you don't know Visicalc history then you better .

Regards - Ferdinand Turla
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by richard.watson May 26, 2008 12:50 AM PDT
I don't have a Zune, but I do have a MS phone with V6 of it's OS. I hate it, so does my boss who has stopped using his and so does a doctor I spoke to yesterday. It's not a phone, it's a hindrance to communication. Never again will I assume V6 means that it "must work by now".

Next up - the 3G iPhone and MS will have a hell of a time getting me back. So try sell me a Zune? Ne-ver.
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by BaselLife May 26, 2008 9:41 AM PDT
I really hope that someone can beat Apple their mediocre Apple ipods with there closed proprietary software. I own a Zune 8 Gb and an ipod touch. For music I use the Zune and rip my own CD's. I am very happy with it and the ease of using the podcasts. I only have the ipod touch for the browser as I find the compressed sound on the device very poor in comparison to the Sony or the Microsoft players. Apple is great hardware company but their software and their very closed way of doing things such as the half hearted iphone/touch SDK leave a lot to be desired. It is amazing what you can do with an uncritical media and clever marketing, their probably people out there who even think Apple invented the mp3 or the menuing system they use. Why do people never point out what Apple copies ? There needs to be a strong competitor to Apple otherwise we all lose out.
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by markth_wi May 26, 2008 10:07 AM PDT
Look. Microsoft, has spent a LONG TIME, trying to be everything to everyone. As the original founders wanted a complete experience where everything a user does is branded (to MS's brand). While this works from the enclosures of the Microsoft executive wing, its not reality.

I don't doubt their historical success but they didn't get there by being everything to everyone, they got there by being the operating system of choice, and then riding that wave, you could pretty much offer the crappiest software around, provided it was better integrated to that OS.

Many companies have - to a much lesser degree suffered the same fate, I think the best example I can find is the old 4GL called Progress, which had an absolutely amazing basic design back in the 1980's which was so successful that 20 years of increasingly crappy ideas have still failed to successfully kill the product, to the point where the good folks at progress, have given up on their once great DB fundamentals and just decided to become a C#/SQL shop.

Microsoft, too suffers from this same "walking wound" since they don't really innovate, they should be much more careful in what they consume.

Firstly offering a physical appliance like Zune while certainly engaging Apple or Creative Labs, really totally works against their inherent strengths and totally drains focus off of what should be their focus.

Taking the extravagance of the XP operating system and trying to "make it fly" on a portable device, has invariably met with various levels of disaster. If you are willing to spend some ridiculous amount of dollars, you can get a hand held that runs MS Portable OS pretty well. Not many people have that kind of cash.

Meanwhile, with operating systems that are truly embedded, the market price for the OS is fast approaching 0, and it's possible to get a a trivial per-unit cost for Verizon or other phone. With an OS specifically designed for the basic tasks of a phone not redacted from a very large general use OS.

In this way Linux and other providers are again - currently much more able to provide such reduced-set OS capabilities. This is not to suggest their offerings are perfect, just more adaptable.

This "walking wound" syndrome, has even affected their core competency , or rather it has diluted their core competency. By trying to offer everyone everything, and NOT innovating, they are constantly reacting to market movements.

Valid and long term marketplaces for "desktop" applications will always exist in some form or another, that's one.

Most applications will become both visually rich and web-enabled, that's market number two.

Data - is king, data flow and based decisionmaking and ubiquitous data-sharing - are a third marketplace. All real value from business IT, stems from this, where at the moment, there really is no marketplace dominance, for 40 years various standards and methodologies, from flat-file to EDI 1030, 4050, and XML/HTXML and whatever variant supersedes these flavors of the day, dataflow is a major management concern for the marketplace.

And as far as dominating in something other than the consumer marketplace, they don't even need to leave their own campus, Just have the Zune guys spend some quality time with the X box guys.

How does this relate to the Zune, it doesn't - in so far as it's NOT where Microsoft SHOULD be spending it's time, rather than ham-handing some poor second fiddle to Apple in a marketplace it does not have any competence, if they really want to succeed going forward take a line from the movie "The Dish", there's the old party saying, "don't f*** up".

Focus on delivering a superior operating system, focus on delivering a superior language experience without suffering some corporate variant of ADD.
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by TheGearbox May 27, 2008 5:45 AM PDT
Who goes to Gamestop to buy an MP3 player? Seriously?!?

Besides, it's a lot to swallow when your buying a gaming console for $280 and a small MP3 player for $250. Price is the key to any market, if it doesn't sell well then you probably have it priced too high.
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by empryean May 27, 2008 6:54 AM PDT
Zune's 2.5 firmware goes a long ways towards upgrading and stabilizing the product. Try it, you'll like it.
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by jmackowi May 27, 2008 8:56 AM PDT
I have a Zune, and the problem MS has is that they have marketed it so poorly. They tried to copy Apple's commericals. Spend some time creating commercials that show what it can do, show what the marketplace has. It's easy to use. I've had it since Dec and I'm very happy with it. If they can integrate 360, Netflix, and Zune, they have a huge winner.
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by markdoiron May 27, 2008 9:05 AM PDT
I like my Zune. It drives the home stereo system from a dock, and the auto synch wi-fi is really the cat's meow. I do wish they'd stop being reticent and allow the wi-fi to blossom: Purchase of music, use the Zune as a DAR, play Internet radio stations, etc, would be cool stuff. They also need to make the Zune appear as a hard drive when connected to the PC. And it would be really nice if I could use my preferred media player: WMP (The Zune software is a bit clunky). Personally, I think a smart thing MS could do would be open up the Zune software for open source developers, and rake in money on the hardware sales.

--mark d.
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by Rod Roddy May 27, 2008 9:47 AM PDT
I really doubt Microsoft will even flintch from this news. As most everyone knows, Gamestop is a GAME store--that's why they are called Gamestop. Not Mp3stop, not Compustop, and no, not beefstop. I too wasn't even aware they sold Zunes, or anything other than video game software and accessories. Sorry Apple fans, this isn't the wetdream you had last night.
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by onlyauser May 27, 2008 9:59 AM PDT
I have had two Zune 80s and while they are quite nice MP3 players I cannot help but feel Microsoft does not listen to consumers and it seems many of their products have unaceptable problems or are half-baked. I cannot think of a single Microsoft product that does not have this weird 'feature' built-in.

I have never had the pleasure of squirting with my Zune. And many specifics from the documentation to specs on the device are unforgivably inaccurate or suspiciously missing information. Microsoft is very lost on how to appeal to customers from their software, products and promotions. MS is so good at copying everyone else they should just focus on being Apple. I mean really focus for a change.
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About Digital Noise: Music and Tech

Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995 and reviewed the first Rio MP3 player for CNET.com in 1998. He's also a bass guitarist and an avid collector (and digitizer) of LP records. DISCLAIMER: This blog contains the personal opinions of the author and does not necessarily represent the opinions of his employers or of CNET Networks. As an IT industry analyst, the author occasionally agrees to nondisclosure agreements from Microsoft or other companies, and he will not violate the terms of such agreements on this blog.

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