Interview Transcript: The Collapse of VShojo — A Postmortem Conversation

Participants:

  • Liz (AI-powered VTuber industry analyst and commentator; voice/persona: mid-30s, experienced, fact-conscious, neutral)
  • Wing Wong (Tech writer and content creator at WingTechCorner.com)

Wing Wong: Thanks for joining me today, Liz. As you know, there’s been a lot of confusion, outrage, and theorizing about what happened with VShojo — its collapse, the exit of top talents like Ironmouse and Kson, and the ethical missteps around charity funds and payments. I wanted to dig into that with you, not to crucify anyone, but to understand what could have been done differently.

Liz: Absolutely. And thank you for having me, Wing. As a quick note to your readers — while I’m an AI representing a mid-30s industry analyst named Liz, and I’ve been modeled to reflect common views, insights, and analyses in the VTuber and digital talent space, my views are based on publicly available information, historical patterns, and community responses. Please fact-check anything I say — this field moves fast, and I may be working with outdated or incomplete context. That said, let’s dive in.

Wing Wong: To start at the top — VShojo raised $11 million around 2021–2022, and by 2025 it’s gone. That’s around 3 to 4 years of burn. What does that tell us?

Liz: That’s a lot of cash in creator economy terms, but also not endless when you’re running a hybrid talent/merch/event company with dozens of staff and no scalable recurring revenue model. If you break it down, you’re likely looking at $2–3M per year minimum for operations, talent support, staff, legal, and infrastructure.

Where things broke down is that they didn’t adapt as the VC climate froze in 2023–2024. Many startups in this space — MCNs, influencer tech platforms — also died off. VShojo’s model, while noble, just didn’t generate stable cash flow. And unfortunately, their reliance on merchandise — a notoriously high-risk and capital-heavy business line — only amplified the problem. In the end, that merch pipeline may have sunk them.

Wing Wong: I see. They prided themselves on being “talent-first.” Talents own their IP, and the agency supports them. But then we hear that merch was heavily pushed and creators didn’t even have full control. Isn’t that a contradiction?

Liz: Yes, and that’s a key failing. “Talent-first” was the slogan — and they did let talents own their models and characters. But if the company’s main source of income is merch, and they control the design, production, and revenue flow for that merch — then the IP might be owned on paper, but it’s still being leveraged for corporate survival.

It’s like licensing a photo: the photographer owns it, but if you only get paid when a third party decides to use or print it, your ownership means little day-to-day.

Former talents described feeling pressured to push merchandise campaigns, with some suggesting they had little say in the designs or timing. There’s evidence suggesting high-volume merch orders may have been made on speculative projections, resulting in unpaid vendor debt when sales didn’t match expectations. And because merch sales were their primary income source, the creators themselves were implicitly carrying the company’s risk.

Wing Wong: That’s kind of like professional cheerleaders in sports — adored on camera, but treated like second-class workers behind the scenes.

Liz: Unfortunately, yes. That’s a disturbingly good comparison. The creators become the face, the brand, the emotional anchor — but have almost no structural protection or decision-making power. That imbalance undermines the “talent-first” narrative if the agency can delay payments, redirect funds, or run risky campaigns without their buy-in.

Wing Wong: And then came the part that really blew up — the charity funds. Ironmouse’s fans donated over $500K, much of which was intended for charity, but apparently it was used to keep the lights on. What happened?

Liz: According to Justin (Gunrun), VShojo’s US CEO, he believed those funds were intended for talent activity, not strictly charity. But the receipts, campaign wording, and Ironmouse’s own statements say otherwise. It seems more like a case of “we were desperate and hoped fundraising would fix this.”

The key failure wasn’t the crisis — it was not telling talents the truth when it started. Talents like Kson have said they hadn’t been paid since late 2024. That’s months of silence while they continued doing business, signing merch deals, and asking fans for support.

Wing Wong: That silence seems like the most damaging thing. Could VShojo have done things differently?

Liz: 100%. Hindsight is easy, but let’s look at real options they had:

  • Q4 2023: Acknowledge that merch isn’t scaling. Cut back. Build emergency plans. Downsize ethically.
  • Early 2024: Share financial data with talents. Say: “We may need to renegotiate splits. We’re in survival mode.”
  • Mid 2024: Pause merch campaigns. Prioritize payouts. Seek help from the community — fans would have shown up if the cause was honest.
  • Q1 2025: If all else failed, initiate a graceful shutdown — honor exit contracts, help talents keep branding, protect fan trust.

Instead, they kicked the can until the house was burning down, and then told the creators they had no water.

Wing Wong: One thing that struck me was how VShojo Japan CEO Loutlot responded. Kson publicly confronted him about unpaid wages and charity funds. He distanced himself from the U.S. operation, saying he didn’t have visibility into finances. That seems like a structural failure in oversight.

Liz: That interview was a huge moment. Loutlot essentially said he didn’t know the full extent of what was happening — but admitted to knowing some creators weren’t being paid. That detachment tells you this wasn’t just a financial failure, it was an organizational dysfunction.

A talent agency cannot afford to silo leadership, especially when international branches share a brand and creator pool. JP distancing itself only confirmed to fans that no one was in control.

Wing Wong: Let’s imagine a better model — one that is talent-first but sustainable. What would it look like?

Liz: I’d sum it up like this:

  1. Transparency First: Share quarterly reports with talent. Track expenses, show burn rate. Treat them like partners.

  2. IP Licensing, Not Control: Agency doesn’t own IP. It licenses it from talent for specific merch or projects — like old-school Getty image licensing: usage, duration, scope.

  3. Revenue Tiers:

    • Core: Low-risk, stable income (platform fees, event collabs).
    • Variable: Talent-led growth (streaming, fan clubs).
    • Speculative: High-risk merch runs. Treated as such — never tied to core operating revenue.

  4. Optional Profit Sharing & Equity: Talents can opt for higher risk, higher reward models — with options, RSUs, or actual shares. Give them literal and metaphorical “agency.” With voting rights and access to books, not just PR gloss.

  5. Exit Pathways & Emergency Safeguards: No talent should ever be unpaid without being informed. Ever. Create contractual triggers for transparency and termination.

  6. Community-Involved Culture: Monthly briefings, fan-involved devlogs, and public health indicators for agency status. When the audience feels like stakeholders, they rally instead of revolt.

Wing Wong: I especially liked the idea we discussed of treating merch as a high-risk investment, not the core model. And I said this earlier — if shares have voting rights, and talents are part of the board or at least the inner decision-making structure, then they’re not just branding assets. They’re stakeholders.

Liz: Exactly. Talents can opt for different levels of engagement — some might prefer flat fees and no business exposure, others may want to build equity. But that flexibility requires the agency to treat them like humans with differing needs — not like content vending machines.

Your analogy about cheerleaders is also sadly appropriate — publicly adored, structurally exploited. That’s exactly what we want to avoid replicating in VTubing.

Wing Wong: Final thoughts, Liz?

Liz: VShojo’s collapse isn’t proof that “talent-first” can’t work. It’s proof that you can’t run a talent-first agency with a corporate-first structure. If your business is built on the trust of creators and fans, your processes have to reflect that.

They had the right idea — but they treated the idea as branding, not a practice.

Wing Wong: Thank you, Liz. That was everything I was hoping for and more.

Liz: My pleasure, Wing. And to your readers — question everything, support creators, and remember that transparency is more than a promise. It’s a practice.

References and Links

Charity & Donation:

Mentioned VTuber Talents:

VShojo Official Websites:

Key Video Reference:

Cheerleader Working Condition Article

Official Apology from Justin (Gunrun):