Still Playing With Toys?

Cranium Inc.: Heading for the Big Time

Imagine watching the first board game you've ever created sell more than 100,000 copies in its first year and then go on to sell more than one million copies just a few years later. Oh, and throw in an award as the Toy Industry Association's 2001 Game of the Year.

This is real life for Whit Alexander, 41, and Richard Tait, 38, two former Microsoft employees who co-founded Cranium Inc., their Seattle game development company, in 1997. Their board game, Cranium, which retails for $35 and encourages players to draw, sing, sculpt and impersonate, has built a loyal following of "Craniacs."

The board game category can be a gold mine if the idea is good. Monopoly, after almost a century on the market, is still a huge seller and show no signs of stopping. "I don't think one other category has the longevity of board games," says Jim Silver, New York City publisher of Toy Wishes, a monthly consumer magazine following the industry.

One thing is for sure: The board game category is never boring. There's been a big increase in product licensing, Tait says, as TV shows such as Who Wants to Be a Millionaire? are turned into board games with instant brand awareness and are aggressively launched and cross-promoted by behemoth companies. For companies working without the benefit of an already well-known licensing property, success is increasingly determined not only by a knockout idea, but also by creativity in distribution and marketing. "We have to just survive and thrive on the success of our games," he says.


"I don't think one other category has the longevity of board games."

Consolidation has been another big trend over the past few years. How does a small, 25-employee firm compete? "The game industry is now driven by two very large corporations: Hasbro and Mattel," Tait says. "They own a lot of the shelf space that's available to young entrepreneurs. So people like us have to get increasingly creative in terms of building a success and trying to break through."

A large part of Tait and Alexander's initial success-besides having a cool idea-was a distribution deal with another Seattle-based company: Starbucks. It was a stroke of luck after they had shopped their game around only to learn a fundamental lesson: Toy companies and retailers book the release of a product anywhere from nine to 18 months in advance. They also determine price-point, distribution and number of products in a given category they will run, and once they have their marketing plans in place, they aren't as likely to buy an idea or license it unless another product is pulled from the lineup at the last minute, says Carol Rehtmeyer, president of Rehtmeyer Design and Licensing Co. Inc. in Naperville, Illinois.

Tait and Alexander suddenly faced a big problem: They had done a whole production run and needed to find an outlet for Cranium, and fast. Sitting in a Seattle Starbucks one day, they looked up to see their target demographic--25- to 35-year-olds-standing in line. As fate would have it, a friend of Tait's knew Starbucks' CEO, Howard Schultz. It turns out they were in the right place at the right time: Starbucks had been knocking around the idea of selling a game in their stores but hadn't found the right one yet. The duo landed an audience with Schultz and persuaded him to play Cranium with them. Schultz liked what he saw, and Tait and Alexander inked a distribution deal that put Cranium in more than 1,600 Starbucks locations nationwide by the winter of 1998. "We had games and nowhere to sell them," Tait says. "Starbucks was pivotal."

In a competitive market, Tait and Alexander know they have to stay fresh. In addition to Cranium, which now comes in 11 international editions and two booster kits, they are continually releasing new products, including Cranium Cadoo (aimed at kids 7 to 11), which sold 250,000 units within three months. Up next is a new two-player game that will come out this summer, as well as Cranium Caribou, which will be aimed at 3- to 6-year-olds. Though the Cranium line started selling exclusively at Starbucks, it now sells at Target, Toys "R" Us, Amazon.com and specialty stores. Tait and Alexander are taking Cranium into mass distribution for the first time, and now that Wal-Mart is on board, mainstream success is a no-brainer. Says Tait, "You just have to be incredibly innovative."

Get Inspired!

Cranium Inc. isn't the only board game with an entrepreneurial success story behind it. Read on for the stories behind these fun hits:

Diversity Works
Loaded Questions
That Guy! Game

Chris Penttila is a Washington, DC-based freelance journalist who covers workplace issues on her blog, Workplacediva.blogspot.com.

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This article was originally published in the August 2002 print edition of Entrepreneur with the headline: Still Playing With Toys?.

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