The rise of the ‘Wimpy Kid’ empire

November 29, 2012, 3:19 PM UTC

Jeff Kinney

FORTUNE — Jeff Kinney is a little loopy. The 41-year-old author-cartoonist has been working ‘round the clock on his $550 million Wimpy Kid empire, juggling movies, personal appearances, and his latest book, The Third Wheel, which hit shelves on November 13.

Planted on a brown sectional in a tasteful living room in Plainville, Mass., Kinney seems a million miles away from the humiliations of middle school, the setting of his series. But this is where he stays up until 2 or 3 a.m. sending his fictional alter ego Greg “Wimpy Kid” Heffley, Greg’s big brother Rodrick, and sidekick Rowley into action. For his latest book, he’s been sketching black-and-white cartoons that throw Greg into the minefield of adolescent love.

Those sleepless nights have paid off big. More than 6.8 million copies of The Third Wheel will be printed — the largest first run of any book this year, according to Kinney’s publisher, Abrams. “It’s been a surreal experience,” says the soft-spoken author.

Kinney, a New York Times best-selling author for five years straight, is a publishing star. And, in many ways, his success reflects the changing landscape of the children’s book market.

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Twenty years ago, children’s book publishers sold mostly to librarians and teachers. A decade ago, though, state funding took a serious hit and publishers stepped up their marketing to kids and parents via bookstores, says Lin Oliver, executive director of the Society of Children’s Book Authors and Illustrators. Kids eagerly awaited the next titles, sometimes in paperback, of series such as Percy Jackson and the Olympians, The Hunger Games, Twilight, and, of course, Harry Potter. “Children’s publishing became more of a business with breakout hits,” Oliver says. Books with graphic elements, like the handwritten text and cartoons of the Wimpy Kid books, became especially popular. “They are not like book report books,” Oliver says.

These hits have helped propel the thriving children’s and young adult book market, which posted sales of $845 million the first six months of 2012 — up by 41% from the same period in 2011, according to a survey by the Association of American Publishers.

The Internet has also helped some children’s writers find dedicated followings. “Authors can reach kids directly and get them more excited about a book series,” says Harold Underdown, author of The Complete Idiot’s Guide to Publishing Children’s Books. ”Publishers are looking online more.”

Indeed, Kinney may never have become a children’s book success had it not been for the Internet. An aspiring news cartoonist, he was rebuffed by the newspaper industry for years. Dejected, he knew his writing was strong but his cartooning style was too primitive for the funnies page. So Kinney spent four years with a sketch pad, drawing scenes that channeled his middle school years.

Kinney says he initially intended to write a humor book for adults. He thought that adolescence, a stage of life filled with fear and self-absorption, could be mined for laughs. “I am sure if the camera crew followed me around at middle school, I wouldn’t be happy with the results,” he says. “I am capturing Greg’s life at the worst possible moment. He is a normal, flawed kid.”

In 1998, Kinney saw Adobe’s (ADBE) Flash player on the Internet for the first time. Thrilled, he circled the date on the calendar. “I knew my life had changed. I could reach an audience without going through a gatekeeper,” he says.

Six years later, he got his break working as a game developer for the educational publisher Pearson (PSO). In summer 2004, the publisher posted Kinney’s middle school cartoons in serial form to attract kids to its site. By the end of the first year, the site had 12 million unique visitors, and within a year-and-a-half, 20 million.

Armed with the promising web traffic stats, Kinney attended a comic book convention in New York to pitch a book. Many publishers told him they didn’t know if a web following would translate to print sales. But Abrams, which specializes in illustrated books, agreed to publish it, but for kids rather than the adult audience Kinney had initially sought.

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Thanks to the support of his online following, Kinney’s Diary of a Wimpy Kid made it to the New York Times best-seller list  just two weeks after it hit shelves in 2007. Wimpy Kid books have been published in 35 languages in 36 countries, and he travels to the international markets where his books sell best.

Kinney may seem like an accidental children’s book author, but he has worked hard to keep his brand a perennial favorite. A one-man show, he writes and draws his books at a clip of about one a year.

“I don’t want the series to feel like pulp, so I put a lot of time into writing good jokes to make sure the quality stays high.” In fact, he starts every book with the jokes, then writes the text, and finally adds the cartoons. Kinney also chooses merchandising opportunities carefully so he doesn’t overexpose his stories and characters.

Though he didn’t write the screenplay for the three Wimpy Kid movies, Kinney says he works closely with 20th Century Fox to make sure the voice and feel of the films is authentic wimp.

Kids aren’t the only ones showing their appreciation. He keeps hearing from parents that their children are “reluctant readers” who have come to reading through his books. “I had never heard the term ‘reluctant reader’ before,” he says. “I have come to understand there is a whole epidemic of reluctant readership. Usually that means ‘boys.’”

His boy following — Kinney says about 60% of the kids at his book signings are male —  may be another source of his success. “Publishers are always looking for books that appeal to boys,” Underdown says. “It’s a whole new market.”

Kinney, who bought the house next to his own and turned into his workspace, juggles a lot of balls. In addition to creating all things wimpy, he still works at Pearson, for whom he developed the popular online game Poptropica. And he is a scout leader and soccer coach to his two sons. “I am maxed out right now,” he says.

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He says he can bounce from one task to another because of something he had as a kid — attention deficit disorder, which was never officially diagnosed. Though it was hard to pay attention in middle school, he says, he claims it now makes it easy to sketch Greg while holding phone meetings for his day job.

Kinney isn’t sure how long the Wimpy Kid series will last. While most people can thankfully escape the torment of middle school, Greg Heffley can stay there forever. Still, Kinney has other projects in his creative pipeline, including another middle grade series about a character who is the opposite of Greg — impossibly optimistic. Only time will tell if he can strike kids book gold twice. “That’s up to the public. It’s not up to me.”