Basically, after Freddy's shut down, they sold off their stuff in an auction, an entertainment company bought a spare springlock suit, and turned it into Blink the Bunny
The owner and co-owner of the company are actually murderers, who murder the children, and hide them by stuffing them into suits.
The owner's son was killed by the co-owner, who didn't know it was his son (along with his daughter), He stuffed the son in the Blink suit, and altered the suit so that there was no way you could see the endoskeleton, and put his mouth on a permanent smile, as well as put a bit of odors to hide the rotting flesh
For extra info, his mechanics in my fan game idea for him are this: He will start at the stage, wander around the cameras for a bit, and either make his way to your door, or sneak into your office. When he's at the door, you have to flash him with the flashlight until he leaves. If he hides in your office, once you know he's there, you have to shut the lights off and wait for him to leave.
