In the six months after Teddy Ruxpin first hit toy store shelves, it had sold over a million units and moved many more million beleaguered parents to the point of exhaustion. In the six months before it went on sale, it was looking like the animatronic talking bear might never see the light of day.

The 1980s was the high decade of toy store pandemonium, when harried parents would camp out in mall parking lots and lay siege to Toys 'R' Us locations before storming the gates. Star Wars toys were in demand, then G.I. Joes conquered the world, followed by the cherubic (if disturbing, in hindsight) Cabbage Patch Kid dolls. Toy companies were searching far and wide for the next big thing, which had up until mid-decade rendered Teddy Ruxpin both a tantalizing and an endlessly frustrating proposition.

Credit: Getty Images

The brainchild of former Disney Imagineer Ken Forsse, Teddy Ruxpin had been the subject of four failed licensing and manufacturing deals within three years. By early 1985, the talking teddy's best chance at animation seemed to have passed when a deal with Lorimar, the prolific TV production and distribution company, fell through over financial concerns. The crux of it was that Teddy Ruxpin — with layers of plush, foam, plastic, motors, electronics, and a cassette player — was one of the most complicated toy prototypes ever to be produced at the time, with over a dozen parts, and it was proving difficult to find a way to manufacture it in a streamlined and affordable way.

Mike Rounds, a veteran of the toy industry, was brought in near the end of the Lorimar era to assess the progress being made with manufacturers. His diagnosis for the bear's prospects at the time was grim.

"It was no secret in the industry that the bear has been bought and sold [many] times," he recalls. "This thing has failed on an epic scale — not because the product was bad, but because the people who got involved didn't know what they were doing."

The project was temporarily put on pause and some staff were laid off.

Forsse, however, was undeterred. He and his company, Alchemy II, went through many business arrangements looking for the right partner, and many people in his position would likely have thrown in the towel after the collapse of such a big opportunity. But Teddy Ruxpin wasn't just a stuffed mechanical bear to Ken Forsse; Teddy Ruxpin was destiny.

He had been dreaming up an epic fantasy narrative around the character since the early '60s (it was for a brief time a monkey), a Lord of the Rings-type adventure, but starring a bear. According to Josh Isaacson, who runs a semi-official Teddy Ruxpin fan page and is working on a documentary about Forsse, who died in 2014, the story was initially supposed to be presented as a puppet show.

"it was just something he tinkered with after work and in between gigs as he was making a living — it was his dream," Isaacson said. "He wanted to be a puppeteer from the time he was a kindergartener. When he got to be an Imagineer for Disney, he combined the puppet show with the thought of 'Can I take the Country Bear Jamboree and shrink it into a consumer product?'"

Ken Forsse with Teddy Ruxpin. Credit: Getty Images

The animatronics, however groundbreaking at the time, was meant to be a delivery system for the story, which would unspool over many, many cassette tapes (sold separately). Forsse had made a career out of focusing on the technology used to convey other people's fantasy worlds, having also worked for Sid & Marty Krofft and the Disney Channel on their Welcome to Pooh Corner TV series (Alchemy made the animatronic heads and costumes). Now he was determined to tell his own story. It was set in the world of Grundo and had a large and anthropologically diverse cast of characters, including Teddy's best friends, Grubby the Octopede (a giant, happy insectoid) and Newton Gimmick, a flailing but determined inventor.

Intentionally or not, Forsse may have created or developed Gimmick as a reflection of himself. Luckily, soon after the Lorimar deal collapsed, Don Kingsborough stepped into the fray. The former head of marketing and sales at Atari was looking for a new challenge when an old colleague brought Teddy Ruxpin to his attention. It was a perfect match.

Kingsborough got $14 million in seed money for his new company, Worlds of Wonder, from the Abercrombie oil family in Texas, dedicating a full third of it to marketing. Then Kingsborough had 60 Teddy Ruxpin prototype dolls made up, even though they had little idea where they were going to have them mass-produced; the details would come later, after he worked his magic, selling major retailers on Teddy's potential.

The chaos and uncertainty meant that they had missed out on the annual Toy Fair, the February event when toymakers tried to sell their newest products to retailers as must-stock items for the following holiday season. So Kingsborough had to become a traveling salesman of sorts, meeting with store executives to persuade them to make room for Teddy Ruxpin. Complicating matters was the fact that many of them had heard the song and dance before; Kingsborough countered that by *showing* them the teddy talking.

Larry Larsen, who worked with Forsse for years, recorded custom messages for the prototypes. When Kingsborough walked into each meeting, he popped some batteries into the Teddy Ruxpin and it came to life.

"Don hands you Teddy and he turns him on and Teddy opens up his eyes and yawns and goes, 'Excuse me. I must have fallen asleep on the plane,'" Rounds remembers. "You look at Kingsborough and say, 'You're not planning on taking this back, are you?' And, Don says, 'Nope. It's yours.'"

It worked like a charm. Executives took the early bears home for their kids and put in big orders. By late spring, he had pre-sold about 600,000 Teddy Ruxpin units to stores. The only problem was that they still didn't have anyone to manufacture them.

Video of Retro Teddy Ruxpin Commercial

Rounds was rehired and dispatched to Asia, where he would resume his search. With so many moving parts, they needed someone who could handle the bulk of the manufacturing and assembly. Between the complicated nature of the toy and the factories already reserved, they were in trouble.

"Not only did we have to find the technology, we had to find the availability," Rounds said. "We had to get the cost down. We had to find somebody to integrate it. So this thing became a three-ring circus."

They came close a few times, considering a deal with a variety of companies, one of which manufactured Care Bears. Eventually they landed on Kader, a Hong Kong-based group that was a leader in model railway production and could handle the bulk of the work assembling the neckless bear (that crucial part of anatomy was excised to accommodate the larger servo gears inside the original doll).

Given the late start and the gangbusters presales, factories had to be kept open during their usual fallow period. And then when Teddy hit shelves and became a hit, they would be firing on all cylinders seven days a week.

The toy was so impressive, even at the high price point of $70 ($156 today), that it may have been a smash on its own. But Kingsborough would take no chances. Just as he sold Teddy to executives, he committed big resources to selling it to consumers, with an advertising budget in the millions. The commercials, by Chiat/Day, were masterpieces, aimed at kids with imaginary friends at a time when animatronics were still quite novel.

Due to the quick turnaround from prototype to assembly line, Teddy Ruxpin was less than sturdy. Between their shaky construction and the wear and tear kids put them through, they broke all the time. Return rates at some stores were high, and there was some national outrage. So Kingsborough turned it into another marketing opportunity, establishing the "Grundo General Hospital" and encouraging parents to send the toys in for repair.

Kids probably wouldn't have wanted to know what was happening at the "hospital," which was located at World of Wonder's California headquarters.

"Kids would drool on it, crap on it. If you don't track it and give it back to the same person, which was impractical here, the first thing you've got to do is strip the plush off the outside and throw it away. It's contaminated," Kingsborough said. "They found it easier just to do what we used to do in the military, have a rotating pool of replacement items. They'd have a constant stream of Teddy Ruxpins that were being repaired or refurbished, and they would just send you back a new one or a refurbed one."

The process kept people happy (if a bit in the dark). They racked up $93 million in sales that first year and sold 1.4 million Teddy Ruxpins by 1987.

Video of The Adventures of Teddy Ruxpin (Live Action) [COMPLETE]

Selling and repairing toys was only part of the equation. World of Wonder had global ambitions, and Forsse wanted to tell his Grundo stories in different media. They were narrated in the cassette tapes, depicted in books, and then brought to life on TV, first through a live-action animatronic special and then in an animated series on ABC. The animated series began in 1987 and ran for 65 episodes, expanding the Grundo mythology with a load of new characters.

It ended on a cliffhanger, then never got resolved for audiences at home thanks to World of Wonder's breathtaking collapse.

Kingsborough had big ambitions for his new venture and started pumping out new toys. One of their other hit products was a home version of Lazer Tag, which got caught up in a political firestorm. A police officer in Rancho Cucamonga, California, had shot a child who was carrying a toy gun that he mistook for the real deal. Outrage ensued, as did boycotts. World of Wonder filed for bankruptcy in 1988, then shut down entirely in 1990.

Teddy Ruxpin has been licensed to different manufacturers since then, updated from time to time to incorporate new technology and reflect changing times. Hasbro took over the license from 1990 to 1996, while more niche manufacturers have been on it since. A new version was launched last year by Wicked Cool Toys, to strong sales despite the $100 price tag; the Jim Henson Company is even working on a new TV series, because everything from the '80s now gets rebooted.

The bear's red suit has largely been left unchanged, to the relief of Isaacson and his fellow fans, who congregate on the internet, swapping insider stories and memories.

"I'm pretty much an open book with it," Isaacson says of his fandom. "And that comes from Teddy. Teddy taught me the value and appreciating being myself. That's something I've always taken with me."