The book "Adventures in Group Theory" by David Joyner develops abstract algebra and uses it to "study certain toys and games from a mathematical modelling perspective". The main example is the Rubik's Cube, but there are plenty of others. For example, Chapter 4 is entitled "A procession of permutation puzzles" and looks at:
Sam Loyd's 14-15 puzzle. This is a 4x4 sliding grid with tiles numbered 1 to 15, and the bottom right square is empty. The 14 and the 15 have switched places, and the "challenge" is to solve it.
The hockeypuck puzzle. Cut a hockeypuck into 12 pieces as you would a cake (but using a saw as opposed to a knife...), and number them. You can flip the pie along a cut, and you can rotate it (by multiples of $\pi/6$). Solve it.
Rainbow Masterball
Pyraminx
The $2^3$ and $3^3$ Rubik's cubes.
Skewb
Megaminx
I am unsure how it is as a set text or as an introduction to group theory. However, as a source of ideas and examples it is very good! Also, the text is full of SAGE examples, which you may or may not consider to be a good thing. However, if you want to teach someone SAGE or similar then using these kinds of puzzles and games is perhaps a good way.
Finally, using puzzles allows you to (tentatively) introduce group actions. Which is a very important way of looking at groups (but then I am a biased geometric group theorist).
EDIT: David Joyner is one of the authors of the book "Applied Abstract Algebra". This looks interesting and very relevant, but I know nothing about it other than what Google can provide.