zune-cp-3682530

Microsoft's Zune will be available in Canada on June 13. ((Ted S. Warren/Associated Press))

U.S. video game retailer GameStop, which operates in Canada and other countries through its EB Games brand, has decided to stop selling Microsoft Corp.'s Zune digital music player because of a lack of demand.

The decision is unlikely to much affect the chain, which makes most of its sales from video games, but is a blow to Microsoft's efforts to compete against Apple Inc.'s ubiquitous iPod.

"We have decided to exit the Zune category because it just did not have the appeal we had anticipated," a GameStop spokesperson told the Street.com. "It [also] did not fit with our product mix."

GameStop first started selling the Zune because it integrates well with Microsoft's Xbox 360 video game console. The chain said it will continue to sell the device online until its inventory runs out.

Microsoft earlier this month announced it had sold two million Zunes since their launch in November 2006, giving the company a market share of only four per cent in digital music players, according to consumer electronics tracking firm NPD Group. Microsoft is expanding the Zune's availability, starting with Canada, on June 13, although the player launches here without an accompanying online store where users can buy music, as they can in the United States.

Apple in its most recent quarter sold 10.6 million iPods, or more than five times Microsoft's cumulative total over a year and a half. Microsoft is seen as taking market share not from Apple, but from Creative Labs and its Zen and Muvo players. Creative has seen its share drop to two per cent from four per cent over the past year.

SanDisk holds second place in the digital music player market with an 11 per cent share.