Cranium, Inc. Business Information, Profile, and History

Company Perspectives:

Cranium's mission is to lighten and enlighten people's lives with fun moments and memories that give everyone a chance to shine. With multiple activities that bring hidden talents to light, each game in the Cranium family creates meaningful connections that transform ordinary moments into extraordinary fun.

History of Cranium, Inc.

Three-time winner of the Toy Industry Association's game of the year award, Cranium, Inc. creates board games designed to bring out the best in everyone. "Dedicated to restoring the brain to its rightful status as the body's most popular organ," the company has introduced a family of games, including Cranium, Cranium Turbo, Cadoo, Cariboo, Conga, Cosmo, Hoopla, Hullabaloo, Balloon Lagoon, and Zigity. The games are sold primarily in bookstores and Starbucks throughout the United States and in Target, Wizards of the Coast, and through Amazon.com. Cranium's games have won more than 50 industry awards and sell in 20 countries in ten languages.

1997-98: Developing a Game Allowing Everyone to Excel

Whit Alexander and Richard Tait met in the 1990s while working on the Encarta Encyclopedia at Microsoft and discovered that they shared a passion for entrepreneurship. In early 1997, Alexander, a native of Tucson, left his job of five years as developer of systems used in Encarta and other software, "ready to try something else," but uncertain of what that would be. Tait, a native of Scotland, resigned his job as senior manager for Microsoft's Encarta and World Atlas three months later. He had been an employee of Microsoft for the past ten years. Unemployed, the two men began to meet regularly for breakfast at Seattle's Jitterbug restaurant and to discuss starting their own business.

Tait and Alexander first toyed with the idea of starting a dot-com company, but "[i]t was already-been-done-dot-com time," as Alexander recalled in a 2001 Arizona Daily Star article. Soon thereafter, during a vacation with his wife and friends in the Hamptons, Tait came up with the idea that evolved into Cranium. After Tait and his wife easily defeated the other couple at Pictionary and then lost miserably at Scrabble, he began to dream up a board game that would allow everyone to shine and to have a great time.

Tait took his idea to Alexander, who at first laughed at it, then came around. Together Tait and Alexander began work on the board game with the goal of getting it into stores by Christmas 1998. Their first step was to embark on research on intellectual aptitudes, including the studies of Harvard University educator and psychologist Howard Gardner, whose theories explain that people learn and perform through a variety of intelligences. According to Gardner, people who excel spatially and verbally may do well at the game of Scrabble, but will not necessarily stand out at Trivial Pursuit, which rewards a good memory. Alexander and Tait also consulted numerous books about indoor activities, such as parlor games, published before television became commonplace in American households in the 1950s. In so doing, "[w]e were able to get a much richer framework to base the game on than just the left brain/right brain idea," explained Alexander in the 2001 Arizona Daily Star.

The men spent $100,000 of their own money to build and test the prototype Cranium game from 1997 to 1998. In its finished form, the game had four or more players, who moved clockwise around a board to reach Cranium Central. The winner was the player who reached Cranium Central first. To get to their next stop along the way, teams performed activities that were described in four decks of cards called Word Worm, Data Head, Star Performer, and Creative Cat. Activities ranged from spelling backward or forward, to playing Hangman, to defining words, sketching or acting out a clue, drawing blindfolded, impersonating a celebrity, whistling a song, or answering a question about an arcane fact.

Tait and Alexander founded Cranium in 1998. Tait assumed the role of the company's Grand Poohbah. Alexander became Cranium's Chief Noodler. By spring, they had assembled an editorial board of eight to work on questions for the game cards. They also hired Foundation Design of Seattle and illustrator Gary Baseman to help them design the game board, the cards, and the players' pieces, and Chuckerman Packaging Ltd. of Illinois to produce, package, and ship the Cranium game boxes. At each step along the way, Alexander and Tait showed their prototype game to potential consumers and solicited their opinions, a technique they had learned as software developers at Microsoft.

1998-2000: Word-of-Mouth Marketing for a Hot New Start-Up

By summer 1998, the Cranium team was ready to market its game. But the company had missed the window of opportunity for selling games to the big distributors for winter distribution. Thus, instead of getting their game onto the shelves of stores, such as Toys "R" Us, Wal-Mart, and Kmart, Tait and Alexander approached Barnes & Noble, Starbucks, and Amazon.com. These sellers also offered the added advantage of reaching Cranium's target audience of educated, affluent, 25- to 35-year old yuppies directly. Tapping into their network of friends who worked in the senior ranks at Starbucks, Tait and Alexander arranged a meeting that included a few rounds of their new game with Howard Schultz, chief executive of Starbucks. Schultz agreed to sell the game in 1,500 Starbucks coffeehouses. Barnes & Noble put the game in 150 stores. Virgin stores also agreed to carry it after Tait gave a gift copy of Cranium to Virgin founder Richard Branson.

Knowing that they could not afford a large-scale, ad-based launch, the company next hired Wham Communications, a public relations shop. Borrowing heavily from tactics employed in the launch of Trivial Pursuit, Wham embarked on a massive media relations program for Cranium. It persuaded radio jocks at 110 stations nationwide to read Cranium questions out loud over the air and give the game away to those who called in with the right answer. Celebrities received gift copies of the game, and there were game-playing events at Starbucks. For each Cranium game sold, the company donated one dollar to groups that provided visual or performing arts education to at-risk youth.

"Dedicated to restoring the brain to its rightful status as the body's most popular organ," as the company's web site put it, Cranium took hold. It was Amazon's best-selling game for the 1998 Christmas season. In fact, as the season wore on, Tait and Alexander had to fill their cars with boxes of Cranium which they delivered personally to Starbucks outlets after the coffee retailer sold out of the board game. Within four months, the

2001-04: Adding to Its Family of Games

By early February 2001, Cranium had amassed $18 million in sales. In 2001, Cranium Booster Box 2, with additional questions and activities, and sold exclusively at Starbucks, appeared, and in September 2001, Cranium Cadoo for Kids and Cranium Cosmo, an office version of the game, hit the market. Awards began to pile up: the Oppenheim Toy Portfolio's Platinum "Best Toy Award" and the Toy Industry Association's "Game of the Year" in 2002. Parents' Choice, the oldest nonprofit consumer guide in the United States, which reserves its seal of approval for products that meet or exceed standards set by educators, scientists, performing artists, librarians, parents, and kids gave Cadoo its Gold Award for helping kids to grow imaginatively, physically, morally, and mentally and for being fun, safe, and socially sound.

By early 2002, one million copies of Cranium had been sold, and the game had become the toy industry's first bona fide smash hit since Pictionary in 1985 and one of the best selling games for that year--the lone newcomer among the other bestsellers that included Trivial Pursuit, Monopoly, Scrabble, Life, and Ticket to Ride. In response to Cranium's success in Canada, two new editions, the Canadian edition in English and the Édition Québécoise, had been launched in Canada in 2001. These foreign editions were joined in 2002 by the German and Australian editions. In each case, the activities, questions, and references on cards were chosen specifically to suit the language and culture of the targeted nation.

Hoopla, a charade-based game that involved sketching, acting, or craft-making during a timed interval, was the company's new addition in 2003. Zigity debuted at Starbucks in 2004. By then, the total number of Cranium games sold worldwide had reached 2.5 million. Growth continued throughout 2004, with a 32 percent increase in unit sales despite the fact that the toy industry was down 34 percent that year. Between 2002 and 2004, the company had expanded into more than 18 international markets, and growth in its family of games had increased 60 percent overall. In 2003, Cranium had been named "Game of the Year" in Britain, Finland, and Denmark. It continued to be named "Game of the Year" in the United States in both 2003 and 2004.

Cranium also embarked on seven new promotional partnerships in 2003 and 2004 with Columbia Crest, Delta Song, KFC, Land O'Lakes, Pizza Hut, Dr. Pepper, and Regal Cinemas. The goal of the company that had already sold more than seven million games was to "reach consumers where they live, work and play, and not just where they shop," according to its spokeswoman in an October 2004 Money magazine. The company also partnered with Mobliss, a leading provider of mobile media and marketing services with more than 150 million registered wireless subscribers, to bring Cranium to mobile users.

Principal Competitors: Educational Insights, Inc.; Fundex Games, Ltd.; Hasbro, Inc.; Mattel, Inc.; Pressman Toy Corporation; Wizards of the Coast, Inc.; Zindart Limited.

Chronology

• Key Dates:
• 1997: Whit Alexander and Richard Tait start developing the game Cranium.
• 1998: Cranium is founded and becomes Amazon.com's best-selling game for Christmas.
• 1999: The Cranium Booster Box is released.
• 2000: Cranium becomes the number one game on Amazon .com; the Cranium U.K. edition debuts.
• 2001: Cranium Booster Box 2 begins to sell, along with Cranium Cadoo for Kids and Cranium Cosmo; the Cranium Canadian Editions start to sell.
• 2002: Cranium's German and Australian editions debut.
• 2003: Hoopla joins the Cranium family of games.
• 2004: Zigity debuts at Starbucks in 2004.