Seeing the success of Hollywood Squares, both in daytime & primetime, prompted NBC executives to order a Saturday morning spin-off from Merrill Heatter & Bob Quigley. Unfortunately, the track record of game shows on Saturday mornings back then wasn't that great, and that included a pair of previous H-Q entries. In fact, their other entry during the 1968-69 season was a collaboration with Hanna-Barbera, Wacky Races, which was meant to be a hybrid game show/cartoon, but the game show part never got off the ground.
Storybook Squares lasted 8 months, from January-August 1969, airing near the bottom of NBC's moribound Saturday lineup. Peter Marshall continued as host, with announcer Kenny Williams on stage for the first time since Shenanigans as the Guardian of the Gate. Why did it fail? Chalk it up to the indifference of parents who felt that after seeing six episodes of the regular series during the week, they might not have wanted to expose their kids to some of the silliness, even if it was aimed at the kiddo's.
Undaunted, H-Q & NBC would try again, this time folding Storybook into the main show for theme weeks in the late 70's. Original episodes from 1969 have been lost and taken off YouTube, so all we have is a 1977 sample.
By that time, Williams was now a Town Crier instead of the Guardian of the Gate, as the original set had been dismantled long ago. It's too bad that when the ownership of the series changed hands twice, the Storybook version didn't go with it. The last incarnation, MTV's Hip Hop Squares, apparently has been cancelled after two seasons. If we're lucky, maybe Storybook would return to mark its 45th anniversary, but I wouldn't hold my breath.
Edit: 12/10/16: A 1969 episode has just surfaced, featuring Paul Winchell & Jerry Mahoney as Romeo & Juliet, Soupy Sales as King Henry VIII, and Carolyn Jones reprising her Addams Family role as Morticia Addams, plus Arte Johnson bringing the Soldier over from Rowan & Martin's Laugh-In.