Mon August 11, 2003 02:57 PM ET
By Anupama Chandrasekaran
NEW YORK (Reuters) - Roll the dice! When the economic going gets tough, Americans are ready to play.
That approach is what's sending the board game market soaring -- particularly for adults -- even as broader toy industry sales slip.
Indeed, this holiday season, No. 1 toymaker Mattel Inc. is striving for a share of the board game niche as it competes with smaller imports such as Germany's strategy game Settlers of the Catan, already in stores. And mind twister Cranium, which has sold over 3 million games, is aiming to sell even more of its newer versions.
The surging popularity of this market is also pushing the biggest U.S. board game maker Hasbro Inc to introduce new versions of classics like Trivial Pursuit and Twister.
Electronic games, usually played by one person, were popular in the mid-'90s, experts say, but board games can be played by a group, making them more value-for-money.
"When the economy is down, game sales do tend to go up as adults spend more of their disposable income on entertainment at home." said Chris Byrne, an independent toy consultant based in New York.
Monopoly, for instance, was launched during the 1930s Depression, and Trivial Pursuit gained popularity in the recession of the 1970s.
The trend continues in the current economic slowdown as game and puzzle sales surge despite a 1 percent drop -- to $20.3 billion -- in toy industry sales, said research firm NPD Group.
COMING ON BOARD
And, within this category, sales of games for grown-ups in the first half of 2003 surged 84 percent, even as overall game sales swelled 65 percent.
This growth, low entry costs, and high margins were what provided the incentive for two former Microsoft Corp. employees in 1997 to abandon their dot-com idea and compete with toy giants Hasbro and Mattel.
"A software company would have required more than $2 million dollars in start-up costs, and we started our company with just $100,000," said Richard Tait, who set up Cranium Inc. with a colleague, Whit Alexander.
The company targeted adults and marketed the word-and-trivia game through Starbucks Corp. coffee shops and bookseller Barnes & Noble, which previously did not sell board games. The company is on its way to launching new versions this Fall targeting the family and children's markets.
"They found a creative way to sell games, opened a new channel and got new fans to the market," said Phil Jackson, vice president of Mattel's games and puzzles division. "Do I wish we had launched Cranium at Starbucks? Of course."
Mattel may have missed that opportunity, but it has now employed the services of David Long, a budding board-game entrepreneur who quit his job in a real estate company, to produce Scene It?, the movie trivia game with a DVD element. The game will be launched this holiday season.
"You are always hoping to turn it into something more long term and in the case of Scene It? I am looking at it as a platform," Jackson said. "We are beginning with movies, and we can go ahead with music and television shows."
WHO WINS?
"Historically, when people are uncertain about the economy, they buy things they know about," said Mark Morris, a spokesman for Hasbro, the marketer of Monopoly and Trivial Pursuit.
"And, at a time the economy is not doing too well, our games will do well as it's a safe purchase," he said.
Hasbro, whose recent results were boosted by board game sales, is sticking to new versions of old favorites. Planned for release this year are the Trivial Pursuit DVD pop culture edition and a dance version of the party game Twister.
But Hasbro cannot afford to be too complacent as it could face competition from new strategy board games like Settlers of Catan, where players strategize to expand their settlement through trade and war, and Amun-re, a similar game set in Egypt, that are being imported from Germany.
"I think they (Hasbro and Mattel) are limited in what they have done creatively," said Wayne Schmittberger, editor-in-chief of the monthly Games Magazine. "The German games are targeting the niche market of strategy games but the bigger players could lose out a bit."
Board Games Enjoy Big Sales
By LISI de BOURBON, AP Business Writer
NEW YORK (AP) - The recession and fears of terrorism may be killing business most places, but not at Marvin Gardens.
From Monopoly to Scrabble to Cranium, board games are enjoying a surge in sales as people try to enjoy themselves in the safest, most economical place they know - their homes.
Families are spending more time together following the Sept. 11 attacks, and the recession is forcing many people to spend less. Retailers and manufacturers say that kind of behavior typically sends sales of games and puzzles up, and it has so far this year.
Hasbro says sales of its classic board games - including Trivial Pursuit, Monopoly, Clue, Pictionary and Scrabble - have seen a low, double-digit rise during the first three quarters of this year, compared with the same period in 2000.
What's significant is to see that much growth,'' said Mark Morris, a spokesman for Pawtucket, R.I.-based Hasbro Inc., owner of Parker Brothers and Milton Bradley. ``You have to remember, these games have been around for a while. Scrabble is 53, Candy Land is 52 and Monopoly is 66 years old. It really speaks to a trend that people have rediscovered board games.''
Susan Nielsen, 39, said she and her husband introduced her two boys to Tripoley when they were visiting her parents over Thanksgiving in Walla Walla, Wash., and were instantly hooked.
I think it's wonderful family time,'' said Nielsen, who lives in Spokane, Wash. ``It gives us time to visit and talk and be with each other.''
A self-proclaimed board game fanatic, Nielsen said she plans to give Tripoley, which combines Michigan Rummy, Hearts and Poker, to three different people as Christmas presents.
Low on money and tired of television, Rachel Lukawski and her boyfriend recently spent an entire Saturday at home in Chicago doing battle against each other on Scrabble and Monopoly boards.
We had so much fun,'' said Lukawski, 24. ``We were talking about how cool it would be if you could rent a board game and return them a few days later.''
AreYouGame.com, a San Francisco-based Web site that sells board games and puzzles, expects volume to more than double this year, said company president Jim Stern. Cranium, Battle of the Sexes, Harry Potter (news - web sites) games, chess, backgammon and mah-jongg are doing particularly well, he said.
There's nothing better than doing things that really bring people together, especially during a time of uncertainty,'' Stern said. Also, we're seeing an increase in online sales because people are taking more comfort in shopping in the safety of their own homes.''
Bigger outfits such as K-B Toys, Toys R Us and Zany Brainy also are enjoying brisk sales of board games, although they declined to release a specific breakdown of holiday season sales. Most said that board game sales had been moving higher even before the onset of the recession and the terrorist attacks.
It was a good trend to begin with,'' said K-B Toys spokesman John Reilly. ``It just got better.''
The Good News
By Tina Manzer, Edplay Magazine, www.edplay.com
Toy Sales may have fallen this year, but party and board game sales are growing.
The New York Times reported on Dec. 13 that sales of board games rose 23 percent through October. The Times cited figures compiled by the NPD Group, the research firm based in Port Washington, NY, which noted that total sales of board games by all area retailers totaled about $375 million in 1999.
It's quite a turnaround considering that five years ago, "board games languished in the shadow of the brisk sales of video games. But in 1999, the sales growth of video games began to slow while board game sales rose sharply," stated the article.
It attributed the sales growth to a few key factors, including new licensing agreements (Pokemon, Monopoly and Who Wants to Be A Millionaire) and the fact that Americans have been looking for more social forms of entertainment. Games are filling the bill.
Mattel increased the number of new board games it issued this year by 50 percent, releasing 21 titles including The Harry Potter Trivia Game and ThinkBlot, a new game by the inventor of Pictionary.
Steve Benoff, the buyer for F.A.O. Schwartz, reported that classic games were selling much faster this Christmas than last. In fact, he had to reorder additional supplies of Monopoly, Scrabble and Life - first introduced in 1935, 1948, and 1960.
While the big manufacturers and stores report sales growth, how is the specialty market affected? Are new games, and new game concepts, selling as well as the classic games appear to be?
"We've definitely seen a jump," said Joe Miccio, founder of Amerigames International, makers of the "quick games" - QuickChess, Checkers, Backgammon, Parchisi, and Quick Tac-Toe. "We saw about a 50 percent increase in the number of games that we sold." Amerigames sells specialty game and educational stores, as well as independent toy stores and specialty toy chain stores.
While Amerigames International, which celebrates its tenth anniversary this year, can point to different marketing and distribution strategies as contributing to its growth in sales, Joe also noticed that board games, card games, and other activities that call for interaction and socialization are experiencing a resurgence.
"The response that I'm getting from store owners is that people are looking for activities that best use their time, and best use their children's time," said Joe. "They don't want their kids to spend the majority of their time doing mindless things. They prefer to learn, and they prefer interaction as opposed to isolation. The remarks that I'm hearing point to the fact that people are enjoying games for social reasons."
Joe said that people are really just starting to realize the problems that have been creeping up with too much TV, too much Internet, and too many video games. "It's gotten to the point where you can easily count the positives and negatives of each - it's gotten more specific, less speculative. Parents, in particular, are able to focus on what they think is good for their family, for their children. Games by their very nature have you interacting with other people. Plus you have fun when you're doing it."
When I asked if he thought classic games were selling better than new games, Joe pointed out that it was hard for him to say, since the games his company manufactures are classic, but they also offer a new twist. "The Quick Games have three important options, or characteristics, that people are looking for today. First, it's a classic game. You can play the full version Chess, or of Checkers. But the second option is the quick version. That's the new twist. It lets you play at different levels of ability - and quickly - and kids really enjoy that. There's Power Pawns with just the pawns and King's Conquest with just the kings.
"But the third factor of these games is their teaching factor," noted Joe. "Kids are learning how to play the traditional games. The educational factor is something that's in demand today and will continue to be in demand in the future."
Just how big is the US euro-game market? Depends on who you ask.
Late last year, game designer Alan Moon estimated the size of the American euro-game market to be at at 30,000. Bob Herried, Managing Partner of Funagain.com, believes that the actual number is "at least 2 to 3 times larger."
But the market for these games does not appear to have topped out yet. According to Herried, "the overall awareness of [non-standard] board games is on a sharp incline." Larry Roznai, president of Mayfair Games, publisher of the English version of Settlers of Catan, agrees that the industry is in growth mode. "Our sales curve is still rising."
"Boulder" Jim Sandefur of Georgia-based Bouldergames.com thinks the US game market could be much larger with better marketing. Every year, more and more stores sell German games, and more and more people discover them. Boulder Jim says the euro-game market in the US is growing -- "at a steady but not speedy rate."
Internationally, the outlook might not be so good. According to Friedheln Adam, principal of the popular German mail-order business ADAM Spielt, "the German game market is shrinking." While sales of games in Germany might be flat or down, Mr. Adam reports an overall increase in shipments worldwide.
The table below lists worldwide unit sales for some euro-games, to give you an idea of the overall market.
| Game Name | Units Sold (logarithmic scale) |
|---|---|
 |
|
| Isi |  (200) |
| Keydom | (300) |
| Keytown | (500) |
| Keythedral | (600) |
| Roads & Boats | (700) (2nd ed) |
| Roads & Boats | (750) (3rd ed) |
| Morisi | (1,000) |
| Kardinal & Konig: Das Duell |  (1,500) |
| Titicaca | (1,700) |
| Street Soccer | (2,400) |
| Rome | (2,500) |
| Age of Steam | (3,000) |
| ZooSim | (3,000) |
| Puerto Rico | (30,000) |
| Settlers of Catan | (70,000) (Travel ed) |
| Citadels | (100,000) (German and Dutch editions) |
| Starfarers of Catan | (100,000) |
| LotR - Die Gefärthen | (120,000) |
| Daytona 500 | (150,000) |
| Villa Paletti | (300,000) (Pre-ordered after winning the SdJ) |
| Elfenland | (450,000) |
| Carcassonne | (500,000) |
| Apples to Apples | (500,000) (All) |
| Wer wird millionär? | (750,000) (German edition of Who Wants to Be a Millionaire) |
| Cranium | (2,000,000) |
| Settlers of Catan | (3,000,000) (German basic game) |
| Settlers of Catan | (10,000,000) (Basic plus all expansions; all languages) |
|
|
|
| Units Sold (logarithmic scale) |
Some information was provided by the manufacturers, other was culled from public forums, and still more came directly from the game designers.
