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The videos show a blue teddy-bear like character with sharp teeth, singing about hugging and killing.
Parents are being warned to be extra vigilant over seemingly fun videos that feature a menacing character with razor-sharp teeth.
The animated character goes by the friendly name of Huggy Wuggy, leading parents and children to believe the videos are aimed at youngsters and contain no inappropriate material.
But the blue bear-like creature chases and threatens other characters in nightmarish scenarios, leaving many children upset and frightened.
The character is from a survival horror game called Poppy Playtime, but has been made into popular videos which appear on YouTube and have seemingly slipped through parental controls.
Poppy Playtime first appeared on Steam and is made by indie developer MOB Games. In it, the player plays as a former employee who is revisiting an abandoned toy factory previously owned by the game's in-universe company Playtime Co. 10 years after the staff have seemingly vanished without a trace.
The Huggy Wuggy character has also been recreated on Roblox, a virtual community where users can create their own 3D worlds with their own game players.
Primary schools concerned about Huggy Wuggy
West View Primary School in Hartlepool released a statement to parents on social media saying the character "sings worrying songs about hugging and killing".
It said: "In one of the videos, the bear asks the viewer to take their last breath. It is a very deceiving character, as hugs should be seen as something kind and love and because of its name is able to infiltrate firewalls and filters."
They have asked parents to be vigilant while their children are on YouTube.
Parents thought Huggy Wuggy was 'innocent'