U.S. home entertainment giant makes its move.

A major new force in home entertainment retailing has emerged in New Zealand. The territory's master franchisee for Blockbuster has acquired the country's biggest specialist music retailer Sounds.

Under the deal -- for an undisclosed sum -- the 50-plus store Sounds will join about 40 Blockbuster NZ stores and half-a-dozen Games Plus outlets under Icon Digital Entertainment, the new holding company formed by Steve Dods.

Dods is the New Zealand master franchisee for U.S.-based Blockbuster Video.

The move is set to intensify competition in the New Zealand music retail market. As previously reported, leading Australian home entertainment retailer JB Hi-Fi is set to launch its first NZ stores in the first quarter of 2007.

Dods says Blockbuster, Sounds and Games Plus will retain their separate identities, but marketing and product buying will be centralized.

Each chain will also be able to draw upon the other's expertise in different product areas they operate in. For example, games titles may be added to Sounds’ product mix of music and DVD, while small music sections and digital download kiosks are a possibility for some Blockbuster stores.