Worlds of Wonder Worlds of Wonder was a toy company in the 1980s , specializing in interactive talking toys ( usually using a book and tape system ) . Their lynchpin character and franchise was the popular Teddy Ruxpin , and their properties subsequently expanded to include the Talking Mother Goose , " The Talking Mickey Mouse Show " ( with Goofy ) , " The World of Snoopy " and interactive dolls like Julie , as well as more diverse efforts ( notably the Lazer Tag game ) . The Teddy Ruxpin toys were designed by Alchemy II , a group of designers and technicians led by Ken Forsse . On August 4 , 1986 , Worlds of Wonder announced a deal with Henson Associates , Inc . The deal was for a Ruxpin style line of animated talking toys , along with a book and cassette series , to be produced as a collaborative effort between the two companies . Worlds of Wonder ' s CEO Don Kingsborough announced " We have every reason to feel the technology of Worlds of Wonder and the creative genius of Jim Henson will continue to produce wonder and excitement for kids of all ages . " On the Henson side , the company ' s vide president of licensing , Isabel Miller , was quoted as saying " The extraordinary success of WOW ' s talking - toy technology , first popularized by Teddy Ruxpin , has inspired us to consider ways in which this technology can be incorporated with Henson ' s characters . " The agreement encompassed the " The Muppet Show " , " Fraggle Rock " and " Muppet Babies " characters . The latter were the first line and the only to actually make it through production . The Muppet Babies toys debuted in February at the American International Toy Fair in New York City . As " Fortune " magazine described the toys , " Muppet Babies , about $ 79 for a basic kit , have moving mouths and eyes like Teddy Ruxpin . But where Teddy requires a cumbersome cord to converse with other talking toys , Kingsborough ' s versions of Kermit the Frog , Miss Piggy , and other Jim Henson characters are cordless . Five Muppets will be able to carry on a conversation with each other . " The toys themselves were plush , and in place of cords and cassettes in the back , " the source of sound and animation for The Talking Muppet Babies lies in the Magic Trunk , which houses a remote cassette player and a radio transmitter . The transmitter sends voice and movement cues , contained on the special animation cassette to receivers in each of The Talking Muppet Babies dolls . " The toys were announced for release in fall of 1987 . The first in the book and tape series were released that year , with stories and illustrations by the established Henson writers and artists such as Louise Gikow . Titles included " Baby Kermit and the Magic Trunk " , " Muppet Babies and the Magic Garden " , and " Baby Rowlf and the Boomtown Bandits " . The umbrella title for the book series ( and presumably the toys ) was " Muppet Magic . " In May 1987 , Henson signed an extension of the earlier licensing agreement with Worlds of Wonder , which was intended to grant the company exclusive rights to produce animated toys , extend the product types and , " in principal , " cover international markets . These plans included " Little Boppers " , a line of toys ( which included Teddy Ruxpin and Mickey Mouse characters ) who would dance in synch to any nearby sound or music ( from cassette players , record players , or other sources ) . Boppers of Baby Kermit and Baby Piggy were made . Worlds of Wonder suffered financial setbacks and , in August , announced plans to delay shipment of the actual talking toys until later in the year . October 29 , 1987 , however ( known as " Black Monday " ) , brought on an extended stock market crash . which the Muppets themselves subsequently helped address in the special " " . Worlds of Wonder was among the companies affected and declared bankruptcy in 1988 . However , the " Little Boppers " arrived on toy shelves and the book and tape sets were published .