Relax, its just the guys whose always wants to know wants INSIDE and how it WORKS.
Produced in 1985, Teddy Ruxpin is the character from self titled cartoon, and when a TALKING teddy bear came out in the market, it was a Phenomenal. Because of the many things that a stuffed toy could do, it can talk to you, sing you a song, its basically He can be you Best Friend.
And until that then, How it works is one of a future of Animatronics but this time they will show us how.
Source: What's Inside?