Diary of a Wimpy Kid author Jeff Kinney is a kids book star. And, in many ways, his success reflects the publishing industry's shifting landscape.

Jeff Kinney

By Cristina Rouvalis

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. More