PAX, or Penny Arcade Expo, taking place Aug. 29-31 at the Washington Convention Center in Seattle, is the largest video-game conference, rivaling others like E3 and earning the nickname the "Woodstock for gamers." Microsoft, Electronic Arts, Blizzard and Nintendo will be exhibitors there.

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They are living the dream — assuming turning video games into sustenance is your goal.

In 1998, high-school best friends Mike Krahulik and Jerry Holkins were drawing superhero comics in their Spokane apartment. Undeterred by their loss in a magazine’s comic-strip contest, they’d set up their Web site for their strip, which survived on PayPal donations from readers. Then they made a big jump to advertising on the site, but their paying clients barely covered food.

Today, their sarcastically fun gaming webcomic, “Penny Arcade,” is hardly struggling. The comic’s Web site collects more than 70 million hits a month. And “Penny Arcade” has grown far beyond a comic strip, morphing into a video-game convention back in 2004. Friday, Krahulik and Holkins will kick off the fifth PAX, or Penny Arcade Expo, a three-day festival about all kinds of gaming. More than 50,000 gamers, from as far as Australia and Japan, are expected to come.

Nicknamed the “Woodstock for gamers,” PAX attracted 3,000 participants its first year. It’s now grown into the largest conference focusing on video-gaming, rivaling others like E3, an industry-driven convention about electronic entertainment. Heavy hitters like Microsoft, Electronic Arts, Blizzard and Nintendo will exhibit at PAX. There will also be concerts; a room devoted to network computer gaming (LAN party); and the Omegathon, a three-day elimination tournament for tabletop, console and computer games.

“Flash forward 10 years, and we’re kings of an empire,” said Holkins. In addition to the convention, the two have a video-game series and a charity.

Krahulik and Holkins live and breathe games — in fact, they devote the bulk of their time to playing. Whatever console and game you can think of, they have it in their Seattle Northgate office, a haven to all kinds of play, with a pingpong table, giant Nerf guns and a “Rock Band” setup.

A couple of characters

“Penny Arcade” webcomics come out as stand-alone strips three times a week online, and unlike traditional newspaper strips, this one doesn’t shy away from violence or cursing. In addition, the creators’ real lives cross over to their virtual ones. Krahulik proposed to his girlfriend through an early comic strip (they’ve been married since 2000). He also named his son off his strip’s alter ego, Gabriel.

“I really like the name,” said Krahulik. “It was more that I named my character after my future son. Get your head around that one.”

The two characters — Gabriel and Tycho (after the astronomer Tycho Brahe, pronounced Taiko Bra-hay) — are versions of Krahulik and Holkins.

“We hadn’t intended them to be alter egos … but that isn’t how things work,” said Holkins. “Without understanding that we had done it, we were essentially writing down our conversations on a weekly basis.”

Dressed in a yellow Pac-Man shirt, Gabriel is probably the more naive of the two characters, while Holkins’ doppelgänger, the sweater-clad Tycho, is a little more cynical. The two bounce off each other just as they do in real life, a Jay and Silent Bob of the digital realm, where one is not complete without the other.

Fans say the strip creators look like Bunsen and Beaker of the Muppets. Writer Holkins, 32, is the more talkative of the two, whereas artist Krahulik, 30, seems to be more introspective.

It’s no surprise that their strip is often a nonlinear, stand-alone variety, given the random, unconnected things they talk about. Is it fair for a comic book to upset feminists? And is it OK for Krahulik’s son to playact a lightsaber duel between Darth Vader and a clone (only those with the Force can use lightsabers)?

And like “The Boondocks” cartoonist Aaron McGruder, Holkins and Krahulik are no strangers to controversy. For example, they received a cease-and-desist letter from American Greetings Corp. for using Strawberry Shortcake and Plum Puddin’ characters in a strip. And when the outspoken anti-video-game-violence attorney Jack Thompson reneged on a promise to pay $10,000 if someone could make a game showing the reality of video-game violence (a company did just that), they donated in Thompson’s name to the charitable arm of the Entertainment Software Association.

Just waiting to click

The two first met at a journalism class at Mead Senior High School in Spokane.

“Basically, the first day Krahulik showed his portfolio and I complimented it, we’ve been best friends ever since,” said Holkins.

Post-high school, they became roommates and dabbled in superhero strips. Then one day in 1998, they noticed a contest to enter a comic strip for then-popular video-game magazine Next Generation. They came up with five strips … and lost.

“Don’t feel bad, because the story ends well,” said Holkins. “We had so much fun making them, we thought everyone should see these cool comics that we made, so we shopped them around to various Web sites … . Back then it was still weird to have your own site — it didn’t really exist.”

A site called loonygames picked up the strips and asked for more. But editorial conflicts killed that relationship (the two thought the F-word was funny, whereas the site did not), so they moved onto their own Web site. Revenue was based on the number of clicks the ads got.

“We would do most of the clicking,” said Holkins. “You heard of click fraud. We invented that. We would click and click on them until it was $100.”

So they both needed day jobs. Holkins serviced educational technology while Krahulik sold computers and equipment at retail. Their site then moved on to a donation system, using PayPal. But the two craved stability. They found two advertisers, and priced the ads based on their grocery and gas bills.

It was at that point they met Robert Khoo, who as president of operations and business development for Penny Arcade Inc., heads their business side.

“They totally spoke to me. These guys get it,” said Khoo, 28, an avid gamer. “But when I had lunch with them, I realized they had no idea what they were doing.”

The University of Washington business graduate was working for a consulting company and wanted to partner up with “Penny Arcade” to reach the gaming audience. He put together a 50-page business proposal and met with Krahulik and Holkins.

Then Khoo made a pitch: He would quit his job and work for them for free. If in two months he didn’t make it worth their while and pay for himself, he would leave.

That was eight years ago. Now Khoo is the brains behind the expo.

A big PAX party

As for PAX, Krahulik and Holkins came up with the idea of launching their own convention after attending other comic conventions and finding that, “People were coming to just see us,” said Krahulik. “So we said, you know what? Let’s do it ourselves.”

So Khoo set out coordinating a conference, asking strip advertisers to be exhibitors.

” ‘Penny Arcade’ is really polarizing. You either really love it hate it,” said Khoo. “It already built a strong community, so the expo was all about gathering those people into one physical place.”

This year, about 70 percent of attendees are from out of state. Attendees average 28 years old, and 75 percent are male. And to keep the focus on gaming, Khoo aims on being respectful. There are no “booth babes” — scantily clad models dressed as video-game heroines — nor double-decker booths.

“It’s a big party,” said Khoo. “You see people that don’t treat gaming as a pastime but as a lifestyle. You interact with people just like you … and you walk away from a cultural experience.”

And while Khoo tracks the numbers, Holkins and Krahulik mind the art.

“If I looked at a strip and was like, ‘Why does this strip have so many more views?’ I could go crazy,” said Holkins. “When you try to interpret that information, you can come to a lot of wrong conclusions.”

And “Penny Arcade” continues to grow. In May, they released the first in a series of video games, created with partner Hothead Games and called “Penny Arcade Adventures: On the Rain-Slick Precipice of Darkness.” Holkins describes the game as a 1920s-set sci-fi cult adventure with twirling mustaches. By Christmas, they plan on releasing a version on PS3. They also have a charity, Child’s Play, that donates toys to children at more than 50 hospitals all around the world.

But even as they proclaim their “kingly” status, the two don’t dwell on it.

“We’re very insulated from that. It’s rare that we go to conventions. We go to ComiCon and PAX. … That’s the only time we see people responding to the comic,” said Krahulik. “Otherwise, it goes off to the Internet.”

“We make our comic in our little room here,” said Holkins. “Most of the time we don’t have a sense of it. We just try to make the best work that we can.”

Marian Liu: 206-464-3825 or