system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: How small chips in toy cars/action figures can contain melodies/sounds?
gpt
The answer to this is the same as the answer to "how can a thousand decent-resolution pictures or iStore songs fit on a single little tiny microchip in a USB drive?" - digitization. 

Sounds can be transformed into digital signals, where a series of numbers is used to represent frequency and other characteristics that comprise a complex noise. You use computer hardware and software to transform it from a listened-to-noise into a digital string of numbers. Then you store those numbers on a microchip. We've miniaturized computer memory to the point where the numbers can be so closely packed together on a single chip that we can easily store TRILLIONS of numbers in something that'll fit on a fingernail with tons of room to spare... and that's a tremendous amount of room to store pre-recorded voices plus some programming logic to play them in a certain sequence as needed.

All you need to do then is have a second battery-powered microchip (or some other storage room on the same microchip) that is programmed to transform those sounds back into electrical signals that are then sent to a tiny speaker... and Furby is given the gift of annoying the living hell out of anyone within earshot that older than four years old.