Key Points

  • Pixar’s story is one which includes one of the biggest entertainment franchises and one of the biggest names in the tech space – Lucasfilm and Steve Jobs.
  • The animation studio’s earliest beginnings go as far back as 1975 when a team of tech experts and a cinematographer came together to improve the traditional hand-drawn process of cel animation.
  • Although Pixar’s history following its independence from Lucasfilm is a rather checkered affair of successes and financial struggles, it was all forgotten when the megablockbuster Toy Story was released in 1995.

The History of Pixar: What To Know

Pixar Animation Studios is a movie studio that creates completely digitally animated feature films and shorts. Its headquarters are currently in Emeryville, California.

Quick Facts

Year Founded
1979
Founders
Ed Catmull, Alvy Ray Smith
Industry
Computer-animated films
Headquarter
Emeryville, CA
Key People
George Lucas, Steve Jobs, Alexander Schure, David DiFrancesco
Notable Products
Pixar Image Computer, Renderman, Toy Story, Finding Nemo
Website
https://www.pixar.com/

The company first came together in 1979 under the Computer Division of George Lucas’ film production company, Lucasfilm. It was called The Graphics Group while at Lucasfilm and was officially renamed Pixar when it went independent in 1986 under Steve Jobs’ financial backing.

As an independent company, Pixar started by trying to sell hardware geared toward making computer-generated graphics. When that didn’t work, they focused on what they were good at: creating computer-animated shorts and later feature films. They revolutionized the declining animated film industry in 1995 when they released Toy Story, the first full-length animated film made entirely on computers.

In 2006, Pixar was acquired by Disney. As an independent subsidiary of Disney, Pixar went on to produce dozens of successful computer-animated feature films, including blockbusters like WALL-E, Up, Soul and Coco.

Lightning McQueen
Lightning McQueen is just one of the many beloved Pixar-created characters. Image: iStock

These were all made possible due to their groundbreaking open-source rendering software, Renderman, which is able to interface between almost any 3D modeling package and any rendering engine to create nuanced photorealistic worlds. Besides their visual innovations, much of Pixar’s continued international commercial success is also due to their smart, emotional storylines and characters.

The Founding of Pixar: How It Happened

Around 1975, Alexander Schure, who owned the New York Institute of Technology (NYIT), hired a team to work on using computers to improve the traditional hand-drawn process of cel animation. This 2D celluloid-based technique hadn’t changed since the early 1900s.

The four-person crew consisted of computer scientists Ed Catmull and Alvy Ray Smith, programmer Malcolm Blanchard and cinematographer David DiFrancesco. Catmull and Blanchard had been working at the University of Utah, designing software that could build 3D objects. Smith and DiFrancesco had been working on pixel-painting software at Xerox PARC.

By 1979, the team had grown to a dozen and produced their first short film, Measure for Measure. It was 22 minutes long and used digital assistance alongside traditional hand-painting techniques.

In 1980, George Lucas hired the NYIT team for Lucasfilm’s Computer Division. They began to use the software they’d been designing to work on adding digital effects, editing and sound design to Lucasfilm movies. Catmull was put in charge of the Computer Division, and Smith led the special effects team called the Computer Graphics Group. They spent the new few years upgrading their 3D graphics software and started work on a computer designed specifically for pixel painting, the Pixar Image Computer.

In 1982, a short animated sequence they created entirely on computers finally made it into a major movie. That sequence, the Genesis scene in Star Trek II: The Wrath of Khan, is only a minute long. It depicts a sci-fi technology that turns a barren planet into a paradise teeming with life. A year later, they created a short sequence for Star Wars: Return of the Jedi showing a 3D hologram of the Death Star.

Finding Nemo — Marlin
Marlin, Nemo’s father in the movie “Finding Nemo,” a Pixar film | Image: iStock

In 1983, due to George Lucas’ personal and financial problems, he began to sell off pieces of the Computer Division. At the time, Steve Jobs was looking for a new company to run and made an offer to buy the Computer Graphics Group for $7 million. Lucasfilm thought the offer was too low and turned it down.

Catmull and Smith saw the writing on the wall and started looking for outside funding. They designed a business plan based around their pixel-painting workhorses, the Pixar Image Computers, hoping to use hardware sales to fund their first love, making computer-animated films. They took their plan to 35 venture capital firms and other large corporations, looking for sponsorship or partnership deals. Every one turned them down.

Finally, in early 1986, they had only one option left. They called Steve Jobs back to ask whether his offer was still on the table. This time, Lucasfilm was happy to offload the group to Jobs for $5 million. Jobs immediately invested another $5 million into the group, creating a spinout company with a 70-30 ownership split between himself and the original employees.

They called the new independent company Pixar, a mutant portmanteau of “picture maker.”

Pixar Through the Decades

1986-1996 – Pixar Goes Independent

Pixar officially became an independent company in February of 1986. Jobs became the chairperson of the board, and Catmall was installed as CEO and president.

A few years earlier, Lucas had added John Lasseter, a former Disney animator, to the team. Now that Pixar was independent, Lasseter was finally able to take full advantage of all the progress they’d made in digital animation. He began to pump out a series of computer-animated shorts over the next five years, which Catmull believes kept the seedling company alive. Pixar’s first shorts included:

  • Luxo Jr., featuring the lamp that eventually became the Pixar logo
  • Tin Toy, which became the first computer-animated film to win an Academy Award
  • Red’s Dream
  • Knick Knack

Another important income source that kept them alive in their early days of independence came from Disney. Pixar created a system, designed especially for Disney, to help simplify the process of animation and offload the logistics to specialized Pixar Image Computers. They called it the Computer Animation Production System (CAPS). Disney loved it, and it helped keep Pixar in the black and on Disney’s radar.

In 1988, they created a rendering interface technology, Renderman, to make communications between 3D modeling and rendering programs quicker and more user friendly. Renderman has since become the industry standard for fast, photorealistic rendering.

All these software successes were balanced out by a steady string of hardware failures. The Pixar Image Computers and other hardware products they developed weren’t selling. Pixar kept running out of money, and Jobs kept bailing them out. By 1990, the various refinancings had cost Jobs $50 million and made him the full owner of the company.

Pixar decided to sell off their hardware operations and focus on their expertise, 3D animation. In 1991, Moore’s Law finally caught up with the imagination of the Pixar animating team, and they were able to invest in enough computing power to make a full-length computer-animated film. Disney volunteered to finance the project, making a deal with Catmull to collaborate on three fully digitally animated feature films over the next few years.

It took four years for the Pixar team to complete its first movie. They released Toy Story in 1995 to instant international success. The film’s director, Lasseter, won a Special Achievement Academy Award. Pixar was finally on the map, so Jobs took the company public a few days after the Toy Story premiere. The public offering turned him into a billionaire.

1997-2006 – Pixar Goes Disney

In 1997, Pixar Animation Studios expanded their agreement with Disney to include five feature films over the next 10 years. In 1998, they released the first of these, A Bug’s Life, followed by Toy Story 2 the year after. Alongside the Toy Story sequel, Pixar re-released one of their favorite shorts starring one of their most beloved characters, the lamp mascot, Luxo Jr. The playful lamp, now cordless, still appears in the animated logo at the beginning of every Pixar film.

In 2000, they moved the company headquarters to Emeryville, California. In 2001, Pixar released the fourth film in their Disney agreement, Monsters, Inc. In 2002, Disney began to capitalize on the merchandizing side of the agreement, opening a themed ride centered around A Bug’s Life in the Disney California Adventure Park.

In 2003, Pixar released the final film from the agreement, Finding Nemo. Negotiations for a new agreement with Disney were stalling, but film production was not. They released The Incredibles in 2004 and Cars in 2006 under a temporary distribution agreement while waiting for negotiators from the two companies to figure things out.

In 2006, on Pixar’s 20th-anniversary year, Disney bought Pixar. The 1995 public offering had valued Pixar at $151 million. Disney ended up paying over $7 billion. They made Lasseter the Chief Creative Officer of the Pixar subsidiary and named the talented and ever-present Catmull as president of both Pixar Animation Studios and Walt Disney Animation Studios.

2007-Present Day – Pixar Keeps Going

The Disney acquisition didn’t slow Pixar down one bit. As of 2021, they’ve made 24 completely computer-animated films at the rate of about one per year. These include:

  • Ratatouille, 2007
  • WALL-E, 2008
  • Up, 2009
  • Toy Story 3, 2010
  • Cars 2, 2011
  • Brave, 2012
  • Monster University, 2013
  • Inside Out, 2015
  • The Good Dinosaur, 2015
  • Finding Dory, 2016
  • Cars 3, 2017
  • Coco, 2017
  • Incredibles 2, 2018
  • Toy Story 4, 2019
  • Onward, 2020
  • Soul, 2020
  • Luca, 2021
Woody and Buzz Lightyear
Woody and Buzz Lightyear rose to fame in the “Toy Story” film series. Image: iStock

What Are the Most Important Inventions From Pixar?

CAPS

In the late 1980s, the Pixar team created CAPS, a digital logistics simplifier specifically for Disney’s cel animation process. Disney bought the tool and tried it out on a single scene from The Little Mermaid in 1989. They ended up using it for their next 18 animated feature films. In 1990, they used it to make an entire movie, The Rescuers Down Under.

Renderman

One of Pixar’s most successful pieces of software is their Renderman tool, created in 1988. It builds 2D photorealistic image renders from 3D modeling software. Renderman can take any scene created with any 3D package, like Blender, Houdini or Maya, and translate scene information, like light positioning and geometric arrangements, into individual pixel color values to output finished images ready for your 2D screen.

The Pixar team began by creating a tool to automate shading techniques and soon realized that the computer graphics industry needed a standard shading language. Today, besides shading, it also renders camera angles, geometric shapes, descriptions of materials like hair, fur and cloth and lighting.

How Does Pixar Make Money?

Pixar makes money by combining technology with art to make computer-animated films for children that come with enough emotional intelligence and production values to entertain adults as well. Beside box office sales, much of the revenue Pixar brings Disney comes from product licensing and theme park attractions based on Pixar films.

Pixar Acquisitions

Pixar spent years as an independent company working in a profitable partnership with Disney, but eventually disagreements between the two began to mount. Originally, Pixar handled film production, Disney handled distribution and profits were split evenly. What Pixar didn’t like was that Disney owned all the rights to Pixar’s characters and stories.

After years trying to come to an agreement with each other or find suitable outside partnerships, Disney finally decided to make Pixar an honest company and asked for its hand in acquisition.

Acquired by Disney for $7.4 billion – 2006

In 2006, Pixar’s shareholders approved Disney’s all-stock buyout offer equivalent to about $7.4 billion. As part of the deal, Pixar would remain a separate entity from Disney with the same name, logo and office location. All future films would be branded as Disney-Pixar productions.

Pixar: Notable Controversies

Toy Story 2 Deleted – 1998

In 1998, during the production of Toy Story 2, an anonymous user error deleted about 90% of the film. To the team’s mounting horror, the available backups were also filled with compatibility problems.

Fortunately, the Supervising Technical Director, Galyn Susman, had recently given birth, which meant she’d been working on a separate copy of the film at her home. The Pixar team was able to rescue her workstation and use its single remaining copy to painstakingly recreate uncountable hours of animation.

John Lasseter’s Misconduct – 2018

In 2018, chief animator and Toy Story director John Lasseter announced he would be stepping down due to misconduct in his work behavior. His apology letter emphasizes his uncomfortable hugs, but other staff members accused him of unwanted objectifying comments, kissing and grabbing as well as heavy drinking at company events.

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Pixar: Complete Guide — History, Products, Founding and More FAQs (Frequently Asked Questions) 

When was Pixar founded?

Pixar was initially founded in 1979 under the name “The Graphics Group” as part of George Lucas’ Computer Division. In 1986, Lucas sold the group to Steve Jobs, who established it as an independent company. Pixar Animation Studios officially incorporated in California in February, 1986.

Who founded Pixar?

Though they collaborated with and received financial backing from many different people throughout the company’s history, the two characters who had the most to do with Pixar Animation Studios’ founding were computer scientist Ed Catmull and digital graphics expert Alvy Ray Smith.

What is Pixar known for?

Pixar has made many high-grossing box office hits, including Toy Story, Up, Inside Out, Finding Nemo, The Incredibles and Monsters Inc. What they’re best known for, however, is the relatable emotional nucleus of the stories in their movies. Pixar creators seem to understand that besides amazing visuals and engaging characters, successful films must also have stories filled with real emotions and core truths that resonate with people in lasting ways.

Who owns Pixar?

Pixar Animation Studios was bought by the Walt Disney Company in 2006 and is currently a subsidiary of Walt Disney Studios.

Why did Disney buy Pixar?

For many years, Disney and Pixar were partners with a complicated relationship. They worked together well but disagreed over important details like story and character rights.

In 2005, Disney’s new CEO, Bob Iger, attended a Disneyland grand opening in Hong Kong. He decided to push Disney to buy Pixar when he realized that nearly all Disney’s best-loved characters were more than 10 years old.

Disney had the massive marketing network that Pixar needed. Pixar had the innovation, both in ideas and technology, that Disney was desperate to regain. If not heaven, you could say it was a match made in Disneyland.

What is the difference between Disney and Pixar?

Before 2006, Disney and Pixar were separate studios that sometimes worked together. Disney produced mostly hand-drawn animated films, and Pixar produced computer-animated films. The lines blurred as Disney began to make its own digitally animated films and then acquired Pixar, although determining to keep each company’s operations separate and independent.

Today, the main difference is in the feel of each company’s films and characters. One Disney animator described Disney films as, “Once upon a time…” and Pixar films as, “Wouldn’t it be cool if….” Pixar films tend to have more realistic and relatable textures, expressions and character flaws, while Disney often presents more idealized and cinematic storylines, romances and moral dichotomies.

What is the most popular Pixar film?

Pixar’s highest-grossing film so far has been Incredibles 2, which made over $1 billion at the box office on a $200 million production budget. On Rotten Tomatoes, Toy Story and Toy Story 2 both have a 100% fresh rating. Other online surveys based on search volume, box office turnout and scores from critics and audiences rank Finding Nemo or Coco as Pixar’s most popular film.

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