In It's a Very Merry Muppet Christmas Movie, Kermit wishes he was never born after Fozzie loses the loan money and the Muppets consequently lose their theater to Rachel Bitterman. As a result, Kermit's guardian angel Daniel takes him to a world in which he really was never born in order to show him how his friends would be worse off without him...

Ironically, there is no hint as to what happened to Pepe, although a deleted scene featuring Bill Barretta as a newscaster and Kirk Thatcher as a guard at a prison hints that he may have become a criminal.

	"How could things be so bad without me?" Kermit wonders...
	The park becomes "Bitterman Plaza" after Rachel Bitterman bulldozes it. The statue of Kermit, which said "for the lovers, the dreamers and you," becomes a statue of Rachel Bitterman, which says "Conquering nature, one mall at a time."
	Gonzo is a depressed street performer. He plays the guitar and showcases the talent of Amy the Dancing Brick.
	Rizzo ends up on the NBC reality show Fear Factor. A contestant's head is enclosed in the rat's cage, and she is told to eat Rizzo alive, which wasn't in Rizzo's contract.
	Doc Hopper's Frog Legs is a thriving fast-food restaurant, with a franchise in Bitterman Plaza, implying that Doc Hopper's chain was able to prosper because Kermit wasn't there to interfere.
	The Electric Mayhem become "O'Mayhem's Celtic Dance Troupe," choreographed by Howard Tubman. They perform Irish step-dancing in Bitterman Plaza near Doc Hopper's.
	Without Kermit in the way, Bitterman is able to turn what would have been the Muppet Theater into the trendy Club Dot.
	Dr. Bunsen Honeydew is a beatnik doorman at Club Dot. He has sunglasses, a soul patch and headset, and decides who can and can't come into the club.
	Sam the Eagle appears in Club Dot as a wild glowstick-waving, pacifier-sucking dancer.
	Kermit is shocked when he sees Scooter as a cage-dancing raver at Club Dot.
	Johnny Fiama becomes the bartender at Club Dot, where he works for Rachel Bitterman.
	Statler and Waldorf become deadbeat barflies at Club Dot. They buy drinks for the ladies, but once they stop shelling out the dough, Fiama kicks them out.
	Robin ends up as a busboy at Club Dot. He tells Bitterman that there's no more bottled water; she tells him to just fill up the bottles with tap water.
	Beaker ends up as a deep-voiced, big-muscled bouncer at Club Dot who tosses Kermit and Daniel out of the club.
	Fozzie is a pickpocket lurking in the alley behind Club Dot. He manages to snatch Kermit's wallet, even though Kermit doesn't have pockets.
	Miss Piggy is a lonely shut-in living at the Murray Hotel with a lot of pet cats. She uses her acting skills in her career as a telephone psychic. Seeing Piggy in such humiliating circumstances is the last straw for Kermit; he returns to the real world with a new resolve.
	Sal Minella can be seen donning a wig and dress behind-the-scenes for unused scenes at Club Dot, shown during Inside Pepe's Studio on the MGM DVD release of the film.