By 1987, most of Hasbro's toy lines were losing money and internal struggles forced the company to end popular series such as Jem, G.I.

[3][4] On October 3, 2000, German-based company TV-Loonland AG purchased Sony Wonder's television business assets including Sunbow Entertainment.

On September 5, 2001, the company announced a co-production deal with Rumpus Toys to produce Kappa Mikey, with TV-Loonland holding worldwide and home video distribution rights.

On October 12, 2001, Sunbow announced a co-development deal with Nickelodeon to produce Skeleton Key, an animated series based on a comic book of the same name[10][11] for an initial run of 13 episodes.

On November 6, production on TV special Donner was completed (originally started in June 2001[12]), and aired as planned on December 1, on ABC Family.

[13] On April 10, 2002, the studio announced two additional projects - The Many Adventures of Johnny Mutton, and Mr Stick & Slug Boy.

[14][15] Another pickup came on October 8 with a television adaptation of the book The Day I Swapped My Dad for Two Goldfish in development;[15] however, none of these projects would come into fruition.

After the announcement that The Cramp Twins' second season would be produced by fellow-Loonland owned studio Telemagination on October 23, 2002,[16] Sunbow later became dormant after their existing projects were shelved, although they still remained as a company until at least 2009.