Back in August, I wrote about Loot Crate, which had recently filed for bankruptcy. Now it’s time to check back in with them and see what’s happened since then.
When Loot Crate filed for bankruptcy, they received $10 million in financing thanks to Money Chest LLC. While they were looking for bidders, Money Chest LLC decided to fully acquire Loot Crate at the beginning of October.
If you haven’t heard of Money Chest before all this, well, that’s because according to Bloomberg, this investment company got started last year. The primary owner is Joel Weinshanker, who, among other things, controls Elvis Presley’s Graceland.
Money Chest is primarily funded by Weinshanker’s National Entertainment Collectibles Association (NECA). According to its website,
“National Entertainment Collectibles Association is one of the largest manufacturers of wholesale licensed merchandise anywhere. We offer retailers an incredible selection of products based on a wide variety of licenses from movies, TV shows, video games, comic books and more. Whether it’s wholesale products from movies like Aliens and Godzilla, or from Marvel and DC Comics, we provide our retailers with the hottest licensed merchandise they can get.”
Among their licenses are Yu-Gi-Oh!, Godzilla, Crash Bandicoot, several Marvel movies, Teenage Mutant Ninja Turtles, Seinfeld, and many more.
NECA has several subsidiaries that they’ve purchased in the last five years or so. The press release pointed out two of them (Kidrobot and WizKids), but they also own Joseph Enterprises. WizKids is behind gaming-related properties like HeroClix, Mage Knight, and Dungeons and Dragons miniatures. Kidrobot has a lot of kawaii, artistic, and blind bag merchandise both of their own properties and licensed ones (Sanrio, for example). As for Joseph Enterprises, well, you probably recognize their two big products and their slogans:
“Clap on!” *clap clap* “Clap off!”
“Ch-ch-ch-chia!”
So Loot Crate — now technically known as The Loot Company — will join those three under NECA’s umbrella. The two already had a joint manufacturing agreement, so this is a natural fit.
Besides working with Loot Crate, NECA already has contracts with plenty of major corporations, and they create limited-run exclusives for events like New York’s and San Diego’s Comic-Con. So now as Loot Crate’s owner, NECA has a lot of options for crates: include some of their current items, create alternatives of their offerings (different color, additional accessories on figures, etc.), or design brand new items. The first two are both good ways for NECA and The Loot Company to cut down on costs, and depending on the item, may not upset fans as long as crates aren’t always filled with old or copied products.
For NECA, while they already have a slew of licenses, this may allow them to forge new agreements or gain a doorway to other collaborations. They already have some Japanese-related licenses, but as for anime, they are mostly limited to Yu-Gi-Oh!. Perhaps NECA or its subsidiaries will want to make My Hero Academia HeroClix figures. Or maybe they’ll make large Fruits Basket plushies. They are also large enough that it’s possible that stores may want to stock these items.
However, first, they should concentrate on Loot Crate. With new ownership — one that is successful enough to have bought several companies these past few years — it’s unlikely that people will not have their subscriptions fulfilled. However, they still are facing challenges in sending things out on time. That’s probably not going to go away for several months at least, since Loot Crate fell way behind on a lot of their boxes. They owed a lot of people money, and even if Money Chest paid off all the bills, that doesn’t mean the items are immediately available to be shipped out. Some of them might not even have been made or planned out — who knows! As of this writing, my June Hello Kitty and Friends Crate still hasn’t shipped, and the current update has it shipping out by October 15th. Yes, it’s hard not to be impatient, as the chances of another delay rose each day. (EDIT: Now listed as shipping November 8th to 15th — no notification either!)
The Loot Company has already made some changes from Loot Crate. Weinshanker declares this is “Loot 2.0”: “You are going to see it as a platform, not just a crate.”
One of the first changes is Loot Launcher, a Kickstarter-like crowdfunding campaign for new crates and items.
Items and crates are set with a minimum order fulfillment, and if enough people buy it before the deadline, the item(s) will be produced. Right now, there are six campaigns with 2,500 to 3,000 order minimums within about 40 days. While I am not a fan of crowdfunding for big companies, I think this setup makes sense for The Loot Company. Instead of having all those limited one-time crates, let fans decide whether they’re worth it or not.
There’s a chance that all the good stuff will be put into Loot Launcher, but for now, the company needs to work on getting people to actually back these crates. At the 37 days left mark, one was at 45% reach, another at 10%, and the other four in single digits. Ouch!
Perhaps getting sign-ups will be different than getting backers on Kickstarter, but most of the campaigns are very slow right now and are highly unlikely to reach their goal at this pace. It could be for a number of reasons: poor marketing, too many projects right now, not enough detail, too expensive, worries about Loot Crate, bad timing, or just plain bad ideas. If Loot Launcher is supposed to be a significant part of Loot 2.0, then they better figure out why. It’s probably a combination of factors, but since the TMNT 30th Anniversary reached almost 50% in a few days, there is a market for Loot Launcher. That one includes a cool central item (“Spirit of Splinter” figure) as well as other mystery items, unlike some of the others that only include a single item (NECA Gremlins “Dress Up & Play” Figure) or some vague promise of “exclusive content” with what is likely WizKids excess stock (WizKids Board Game Crate).
Otherwise, it’s always good to see a company survive, although I’m sure it’s of little comfort to all those who have been laid off from Loot Crate. Loot Crate already had ties to its new owner, which is good. While I think Loot Launcher fits within NECA’s main idea of cool products, I don’t know if that’s a) going to return the Loot Crate (The Loot Company) brand to profitability and b) that it should be a big focus right now with plenty of crates running months behind schedule.
I am curious as to what else Loot 2.0 is supposed to bring to the table. Although some of the reasons for Loot Crate’s downfall includes complaints like “listen to people who know what they’re doing” and can be remedied fairly easily, subscription boxes are still a highly competitive, often short-lived segment of the market. Crowdfunding may help, but it’s not going to be the answer. Plus, considering a lot of people (including myself) signed up during 50% off sales, outstanding crates are going to have to be…well, outstanding in content to encourage fans to continue paying for crates after their subscription runs out. We’ll just have to wait and see if Weinshanker’s companies’ deep pockets and NECA’s brand power are enough to propel The Loot Company forward in the long term.