Former Microsoft (MSFT) execs Richard Tait and Whit Alexander were kicking around for new business ideas a few years ago when they hit upon board games. On a vacation with friends, Tait noticed that, in the evenings, he could often draw his way to victory at Pictionary but his Scrabble skills seemed to always spell loser. So the pair concocted a new game that included elements of spelling, drawing, trivia, and charades.
With help from Seattle neighbors Amazon.com (AMZN) and Starbucks (SBUX), the pair's 1998 release, Cranium, went on to sell more than 2 million copies at $34.95 each. The two entrepreneurs have since extended their Cranium Inc. into a family of games playing off the same themes.
Tait and Alexander rolled the dice -- and landed on a hot trend. The $870 million board-game business has become one of the few growth sectors in otherwise stagnant toyland. The overall board-games category is up 10% so far this year, according to market researchers NPD Group. Industry leader Hasbro (HAS) says its game sales were up 50% in the first nine of months of 2003.
PLAY MONEY. Game-industry insiders offer a number of explanations for the growth. The post-September 11 "nesting" urge to spend more time with family is playing a role. So is the increasingly popularity of "game nights," inspired in part by the recurring one on the TV show Will & Grace.
For some, games remind them of a simpler era. "I just love all of the salty snacks and gin," says 34-year-old Graham Gemoets, a personal assistant who participates in a game-night group in Houston. "It's like when my parents used to play bridge."
Retailers say board games do well in tough economic times -- just like the past three years. After all, perennial favorite Monopoly was invented during the Great Depression. And board games represent a good value relative to other forms of entertainment. Even fancy new games top out at $50 -- less than it can cost to take a family of four to the movies in some major cities -- and classics like Battleship, Operation, and the Game of Life can be had for less than $10.
"Business is up," says Bob Schwartz, owner of the Games Unlimited store in Pittsburgh. "This has been the case during every recession since we opened in 1979."
SETTING LIMITS. The major toy companies have certainly taken notice. Mattel (MAT), long the leader in dolls and toy cars, launched its biggest board game promotion ever this year for Scene It?, a movie-trivia game with a DVD component. Players move their pieces around a board, answering questions that come both from cards and the TV screen.
Mattel employs a significant amount of market research in developing its games. After interviews with parents revealed they wanted a game that ended promptly and didn't provoke fights among the kids, the company made sure players of its new Break the Safe game had to work together to stop an evil plot to destroy the world. After 30 minutes, the game's timer runs out. "Parents want to be able to say, 'Finish dinner, play a game, and go to bed,'" says Phil Jackson, Mattel's marketing vice-president for games and puzzles.
In another approach, Hasbro has been adding electronic components to its classic games. New this year is Clue FX, which introduces a talking mansion to the familiar murder-mystery game. Its new Twister Moves includes three CDs of music and a specially recorded song by teen idols Aaron and Nick Carter.
STRATEGIC IMPORTS. The real board-game action, however, may lie with smaller companies. With their low cost to manufacture and the ease of marketing through the Internet, the business is enticing entrepreneurs. "A small publisher can invest a relatively small amount of money, make 5,000 games, and start selling them," says Matt Mariani, director of marketing for Out of the Box Publishing, a Madison, Wis., startup with a big hit in Apples to Apples, a word game. "We've never done any advertising."
Some U.S. companies are importing concepts from Germany, where families routinely get together to play what the industry calls strategy games. That has helped five year old Rio Grande Games place 18 of its releases on Games Magazine's 2003 list of the 100 best new games. Among Rio Grande's titles: Clash of the Gladiators, Gnumies, and Where's Bob's Hat?
Perhaps not surprisingly, given its long rainy season, brainy citizenry, and ubiquitous coffee shops, Seattle has emerged as a hot new area for game development. Among the local companies scoring there are Hasbro subsidiary, Wizards of the Coast, creators of the phenomenally successful card game Magic: The Gathering, and Front Porch Classics, in which players build wooden versions of games like tic-tac-toe. Cranium's founders were clearly onto something. By Christopher Palmeri in Los Angeles