This is a pretty easy project and makes a nice holiday gift. This version was made from a scrap piece of hardwood and a 5/8" dowel. As an extra touch, I added a compartment inside the board to store the pieces. The compartment panel is held on with magnets for a clean look.

The quick video shows how the compartment works.

Step 1: Tools/Materials

Tools:

Table saw
Router (optional)
Drill press
1/2" and 5/8" drill bits
Sander
Ruler
Pencil

Materials:

Wood: 5"x5" x 1.25" thick
Oak dowel: 5/8" diameter x 7" long
Magnet: 0.437" diameter (x2)
Flat washer: 1/2" diameter (x4)
Super Glue
Wood stain or finishing oil
Paint (2 colors)

Step 2: Drawing

You will be building to this drawing.

Step 3: Base

Start by cutting the board to 5 inch square. My scrap piece was 1.25" thick but the design works for thicker wood.

Step 4: Grid

My table saw blade thickness is 1/8". Doing the math, I came out with the grid dimensions shown. Set your blade height to .125" and make the four passes.

Step 5: Mark Hole Locations

Mark the center of each square as shown. Use a punch to indent the wood.

Step 6: Drill Holes

I used a 5/8" Forstner bit for the holes. I chose to only go 1/4" into the board.

Step 7: Slot Cut

I used a router to cut the slot in the base. You could also do this cut by doing multiple passes over a table saw.

Step 8: Compartment Holes

I used the same 5/8" bit for these holes. It was a challenge to get the 3.25" depth (multiple setups). Use a 1/2" bit for the washer holes.

Step 9: Washers

Place metal slugs in the base holes. I used four, 1/2" diameter steel washers. Super glue was used for the attachment.

Step 10: Panel

The panel was taken from the cutoff portion of the original block of wood. Drill the magnet holes at the locations shown.

Step 11: Magnets

I used "Super Magnets" which, as the package says, are "extremely strong". After accidentally pinching my finger with them, I agree with the warnings :). Again, for attachment, I used super glue.

Step 12: Sand and Finish

Sand to break the corners. I used danish oil on the base and panel.

Step 13: Dowels

I used a band saw to cut the dowel pieces. You might have noticed that I show 5/8" holes and said to use 5/8" dowels in the materials list. This would be fine if you wanted an interference fit but the parts need to slide in and out of the compartment. Therefore, I sanded the dowel down by 1/32 of an inch before I made the cuts for the pieces. I would have done this using the drill press but the 5/8" dowel diameter was larger than my chuck allowed. Therefore, off to hand sanding :(.