They use the same sound chip, specifically HK628 from Honsitak. Which synthesizes the sounds and also handles the cycling of up to 5 LEDs (as seen in the second video). So in short it's got most of the functionality needed for a toy like this in a single package with a bare minimum of external components needed.

As for why: Cost. Producing a custom chip (ASIC - Application Specific Integrated Circuit ) is expensive. Even greater than the actual development cost (for something like this anyway) are the tooling costs, such as producing masks for the chip. So it's cheapest to use the same old chips as far as possible.