moshi_insideCompanies have a knack for getting children to fall in love with monsters. Whether it’s the wide variety of dueling critters in Pokémon, the saccharine pastels of Neopets, or a movie about children’s screams being used as an energy source, the terrifying truth is that kids like grotesqueties, which is a fun new word I just made up.

London-based tech-slash-media company Mind Candy is preparing to cross the pond, setting up offices in San Francisco and New York to build on its growing audience in the States. The company’s most popular characters are Moshi Monsters, which I see as a cross between “Hello Kitty,” “Neopets,” and “Furby.” My editor contends they are a blatant ripoff of characters in “The Banana Splits,” a children’s TV show from the late 1960s. (Whatever, Old Man Penenberg.)

Either way, McDonald’s in the US has signed on to bundle Moshi Monsters figurines with its Happy Meal – the “kid-sized” meals that come in a cardboard box and ship with toys and diabetes – from December 14 to January 10. Just in time for children to latch onto the toys and demand that Santa fill his bag with Moshi Monster goodies.

For Mind Candy, what started out as an online community for kids has become a market juggernaut, with comic books, magazines, toys, and, coming in 2013, a feature-length movie. Founder and CEO Michael Acton Smith says that Mind Candy sold some $250 million worth of Moshi Monsters-related products in the last two years, and the franchise has sunk its claws into one out of every two British children. 

It wasn’t always this way. Mind Candy’s first game, Perplex City, an alternative reality treasure hunt that Acton Smith calls “a bit of a disaster.” Former Mind Candy employees who were laid off after the game’s flop are likely to agree, as did some of the company’s investors who, sources say, were days away from ousting Acton Smith and taking control of the company. With little left to lose, Acton Smith pushed the reset button, closed down Perplex City and bet everything on Moshi Monsters. The result: over 65 million users worldwide by the start of 2012, mostly in the UK and mainland Europe.

Surprisingly, one of the best things Mind Candy did with Moshi Monsters was branch out into as many areas as possible. By creating a halo of products around the Moshi Monsters website, Mind Candy morphed from being a game company to being a full-fledged media company with video games, books, and all of the other things listed above revolving around the ‘Monsters.

“I think that the major multi-billion dollar franchises in the kids’ space might not necessarily have a TV show at their heart, they’ll have a primarily online experience,” says Acton Smith. (Supplemented with books, movies, toys, and the like that result in plenty of ancillary revenue, natch.)

And as we continue our shift towards mobile – and, indeed, as our existing computers look more and more like those “post-PC” devices – Mind Candy will have to move from the mouse and monitor to the touch-screen. “We think that [the iPad] is going to be the most exciting entertainment device for kids going forward. Not just for games, but also to listen to music, watch video, be educated, read stories, etc.,” Acton Smith says. “That’s the next step – we’re taking the desktop version of Moshi and bringing it to this swipe generation.”

Based on the hours I’ve spent using (and cleaning) the iPad with my nephew, the fact that kids love Apple’s tablet is painfully obvious. While it may be too early for companies to go iPad-only (The Daily might offer a few clues as to why that is) adding support for the device is almost a no-brainer.

Add Acton Smith to the list of people aiming to build the new Disney. As much as that aspiration irritates journalists – Sarah nearly walked out of a meeting with ZeptoLab’s Misha Lyalin when he blithely said that the company’s “Cut the Rope” franchise would compete with Disney – wanting to emulate or supplant Walt’s empire isn’t much different from a startup seeking to “disrupt” Apple or Google. It probably won’t happen, but that’s never stopped an entrepreneur before.

Angry Birds maker Rovio is in this “Disney 2.0″ group as well, as are a bunch of companies nowhere near as baked and ones who have already flamed out.  The brands and products listed above – Pokémon, Neopets, “Monsters, Inc.” – all fought for a throne built from parents’ emptied wallets.

But, as it so happens, children and their two-second attention spans can be fickle. Each of those lines flamed out over the last few years. While there are still people buying Pokémon games, the demographic has shifted from young children to people who may or may not write for technology blogs. Neopets? Well, Neopets went the way of Furby (before the little monster’s attempted comeback). Children will love something and then, once they’ve aged out of it or something new comes out, leave it in the dust.

So despite the movie deal and the 170 million Moshi Monsters trading cards, the 40 million monsters, and the 1 million books Mind Candy has sold, the company is trying to stick to a long term view and not get caught up in being a fad.

“We are building characters and stories that we hope will be enduring for years and years, and that’s not easy to do,” Smith says. “There are many brands that burn brightly and fade away – Neopets is one example, Cabbage Patch dolls, and so on and so forth. But there are some brands, evergreens like Barbie, Hot Wheels, etc. that have been around for decades.” Mind Candy, he hopes, will fall into the latter camp.

In order to get there, however, Mind Candy will have to prove that Moshi Monsters can succeed in the US – and, indeed, the global – market as more than just a website. This Christmas may just be the chance for them to do so, but children have a way of surprising you.

Consider Angry Birds, the hit game which has expanded into toys and partnered with Star Wars, perhaps the holy grail of product tie-ins. As I walked through the aisles of Walmart with my 3-year-old nephew, he stopped to point out, play with, and call the Angry Birds toys by name. He’s never played the games, but he recognizes and likes the characters. That’s huge.

Even though the company’s toys have been in the US for a while, Moshi Monsters is still a way off having that kind of brand recognition. Acton Smith is hoping that the McDonald’s marketing machine and having more Mind Candy boots on the ground in San Francisco in New York will help rectify that. Ultimately, though, Moshi’s success or failure in the US will be decided by the fickle tastes of American kids.