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HistoryThe GloboTech Industries acquiring the Heartland toy company, CEO Gil Mars tells remaining toy designers Larry Benson and Irwin Wayfair to develop actual live-action toys capable of "playing back".
Christy, Alan's neighbour, gets Chip to her brother. Chip rebels and imprisons him. He then leads the Commando to make thousands of Gwendy Dolls to have sentience like him and the Elite. Him and the Elite create and hundreds of the Dolls and, in a pretty bizarre sequence, they strip the Dolls almost naked. It is possible from the actions of the Dolls and the Elite that the Dolls are their lovers. This is further implied when Chip assaults Christy's boyfriend when he kills a few of the Dolls.
The Gwendy Dolls attack Christy and hold her hostage. Alan comes in after seeing her hostage video. He gets Christy out of her bonds and she furiously stamps on all the Gwendy Dolls, crushing them to bits, and saying she hated them anyway.