This is the story of the R1-G4 hand-crafted, prototype figure created in late 1977, because Kenner was working on expanding their new toy line from 12 Star Wars action figure to 20. And, they were looking primarily at two categories: cantina aliens and droids.
One Kenner designer hand-crafted a prototype figure intending to depict a droid seen outside the sandcrawler as Luke and Uncle Owen purchase R2-D2 and C-3PO from the Jawas in Star Wars.
The only reference available to the designer of the droid now known as R1-G4, was this photograph, which was later printed on the box of Kenner’s Radio Controlled Jawa Sandcrawler toy:
The designer misread the photo, though, believing that the white element atop the Treadwell droid (behind C-3PO) was part of the droid he was working on. He designed the element into his prototype as an action feature: a rotating ring of tools (or possibly guns) that offered some play value for the figure. He also mistook the droid’s base as a pair of chunky legs with oversized feet, resulting in a prototype that doesn’t really look much like the droid seen onscreen.
Once Kenner realized that the droid in the film had a static base and lacked the “action” appendages, the character seemed much less appealing and was removed from consideration, leaving this little-known handmade prototype, currently in the Imperial Archives, as the only 3¾” depiction of R1-G4 until 2004, when Hasbro added the character to the Saga Collection. Even then, though, they sacrificed accuracy for play value, adding slide-out claws that (probably unconsciously) echo the action feature of this vintage prototype.