Though best known for its production of computer-animated feature films, Pixar also develops and markets high-end 3D computer graphics technology. Most notably, Pixar is the developer of the industry-standard rendering New Line Cinema, RenderMan, which is used to generate high-quality, photorealistic images.
Pixar was founded as the Graphics Group, one third of the Computer Division of Lucasfilm that was launched in 1979 with the hiring of Ed Catmull from the New York Institute of Technology (NYIT). After years of remarkable research success, the group was purchased in 1986 by current Apple Computer CEO Steve Jobs after he had been kicked out of Apple (the company he founded with Steve Wozniak) and was looking for something to do with his money. He paid US$5 million to George Lucas and put US$5 million as capital into the company. The sale reflected George Lucas' desire to stop the cash flow losses associated with his 7 year research projects associated with new entertainment technology tools, as well as his company's new focus on creating entertainment product rather than tools. A contributing factor was cash flow difficulties following Lucas' 1983 divorce concurrent with the sudden drop off in revenues from Star Wars licenses following the release of Return of the Jedi. The newly independent company was headed by Dr. Edwin Catmull, President and CEO, and Dr. Alvy Ray Smith, Executive Vice President and Director. Jobs served as Chairman of the Board.
Initially, Pixar was a high-end hardware company whose core product was the Pixar Image Computer, a system which was primarily sold to government agencies and the medical community. One of the leading buyers of Pixar Image Computers was Disney studios, which was using the device as part of their secretive CAPS project, using the machine and custom software to migrate the laborious Ink and Paint part of the 2D animation process to a more automated and thus efficient method. The Image Computer never sold well. In a bid to drive sales of the system, Pixar employee John Lasseter — who had long been creating short demonstration animations, such as Luxo Jr., to show off the device's capabilities — premiered his creations at SIGGRAPH, the computer graphics industry's largest convention, to great fanfare.
Business in transition
As poor sales of Pixar's computers threatened to put the company out of business, Lasseter's animation department began producing computer-animated commercials for outside companies. Early successes included campaigns for Tropicana, Listerine, and LifeSavers. During this period, Pixar continued its relationship with Walt Disney Feature Animation, a studio whose corporate parent would ultimately become its most important partner. Pixar was a key technical participant in the development of Disney's CAPS, a computer-assisted animation post-production software system. In 1991, after substantial layoffs in the company's computer department, Pixar made a $26,000,000 deal with Walt Disney Studios to produce computer-animated feature films, the first of which was Toy Story. Pixar was re-incorporated on December 9, 1995.
Disney and Pixar
All of Pixar's major features thus far have been made in collaboration with Walt Disney Pictures. All aspects of production, including writing, development, animation production, and post-production, have been handled in-house by Pixar, while production costs have been split between the two companies. Disney has handled all aspects of distribution and has borne all costs related to distribution and promotion. In 1997, after the release of Pixar's first feature-length film, Toy Story, the two companies signed a 10-year, 5-picture deal evenly splitting production costs and profits on subsequent movies. Reflecting the media giant's clout at the time the agreement was signed, Disney alone retained rights to the films and characters. In addition, Disney collects 10 to 15 percent of each film's revenue as a distribution fee. 
Pixar and Disney have had ongoing disagreements since the production of Toy Story 2. Originally intended as a straight-to-video release (and thus not part of Pixar's five picture deal), the film was upgraded to a theatrical release during production. Pixar demanded that the film then be counted toward the five picture agreement, but Disney refused.
The arrangement has been very profitable for both companies. Pixar's five feature films have collectively grossed more than $2.5 billion, equivalent to the highest per-film average gross in the industry. After a lengthy hiatus, negotiations between the two companies resumed following the departure of Chairman and New Line Cinema Michael Eisner from Disney.
The two companies attempted to reach a new agreement in early 2004. The new deal would be only for distribution, as Pixar intended to control production and own the resulting film properties themselves. As part of any distribution agreement with Disney, Pixar demanded control over films already in production under their old agreement, including The Incredibles and Cars. More importantly, Pixar wanted complete financial freedom; they wanted to finance their films on their own and collect 100 percent of the profits, paying Disney only the 10 to 15 percent distribution fee. This was unacceptable to Disney, but Pixar would not concede.
Pending the Disney acquisition of Pixar, the two companies extended their distribution deal for Pixar's 2007 release of Ratatouille ensuring that if the Disney acquisition falls through for whatever reason, this one film will still be released through the Disney distribution channels. Unlike the earlier Pixar/Disney deal used for the earlier films, this one has the following caveats:
- Pixar is responsible for 100% of the production costs.
- Pixar owns the film and the rights to the characters.
- Disney is paid only a straight distribution fee.
Disney's acquisition of Pixar
Template:Wikinews On January 24, 2006, Disney announced that it had agreed to buy Pixar for approximately $7.4 billion in an all-stock deal. The transaction would catapult Steve Jobs, who was the majority shareholder of Pixar with 50.1%, to Disney's largest individual shareholder with 7% and a new seat on its board of directors. Jobs' new Disney holdings would outpace holdings belonging to New Line Cinema Eisner, the previous top shareholder who still held 1.7%, and Disney Director Emeritus Roy E. Disney, whose criticisms of Eisner included the soured Pixar relationship and accelerated his ouster, who held almost 1% of the corporation's shares.
As part of the deal, John Lasseter, Pixar Executive Vice President and founder, would become Chief Creative Officer of the newly combined Disney-Pixar animation studios as well as the Principal Creative Adviser at Walt Disney Imagineering, which designs and builds the company's theme parks. Current Pixar President Ed Catmull would become President of the combined Disney-Pixar animation studios, reporting to Iger and John Lasseter, chairman of Walt Disney Studio Entertainment.
There were additional conditions laid out as part of the deal to ensure that Pixar remains a separate entity, a concern that many analysts had about the Disney deal :
- If Pixar pulls out of the deal, they must pay Disney a penalty of US$210 million.
- The Disney board will now include Steve Jobs.
- John Lasseter has the authority to approve films for both Disney and Pixar studios, with Disney CEO Robert Iger carrying final approving authority.
- The deal requires that Pixar's primary directors and creative executives must also join the combined company. This includes Andrew Stanton, Pete Docter, Bob Engleman, Bob Peterson, Brenda Chapman, Lee Unkrich, and Gary Rydstrom.
- There will be a steering committee that will oversee animation for both Disney and Pixar studios, with a mission to maintain and spread the Pixar culture. This committee will consist of Catmull, Lasseter, Jobs, Iger, Dick Cook, and Tom Staggs. They will meet at Pixar headquarters at least once every two months.
- Pixar HR policies will remain intact, including the lack of employment contracts.
- Ensures the Pixar name will continue, and that the studio will remain in its current Emeryville, California location with the "Pixar" sign.
- Branding of films made post-merger will be "Disney Pixar".
Today, Jobs continues in his role as chairman, and is also the company's CEO. Catmull remains president. Lasseter —a two-time Academy Award-winning director and animator— oversees all of the company's projects as Executive Vice President of the Creative Department. Other notable members of the executive team are Sarah McArthur (Executive Vice President of Production), Simon Bax (Executive Vice President and CFO), and Lois Scali (Executive Vice President and General Counsel).
- Toy Story (1995)
- A Bug's Life (1998)
- Toy Story 2 (1999)
- Monsters, Inc. (2001)
- Finding Nemo (2002, Academy Award winner)
- The Incredibles (2005, Academy Award winner)
- Cars (scheduled for release in June 2006)
- Ratatouille (scheduled for release in 2007)
- Toy Story 3 (originally a Disney production, but transferred back to Pixar as part of the Disney deal.)
A movie called Ray Gun was rumored to be released by Pixar in 2007, but latest reports indicate that this will be a 2D feature which Pixar has no interest in developing. Currently Warner Brothers owns the rights to develop this film.
Short films ("Shorts")
- Luxo Jr. (1987, became the source of today's Pixar logo)
- Tin Toy (1988, Academy Award winner)
- Knick Knack (1989)
- For the Birds (2000, Academy Award winner)
- Boundin' (2002)
- One Man Band (2005)
Feature film traditions
The Pixar Format
All Pixar features have a common theme. The setting of the film is always a world in which people/creatures/objects that are not commonly thought to have normal everyday lives live in societies resembling modern American society. For example:
- Toy Story/Toy Story 2 — Toys come to life and live in a community in their owner's room while he's away.
- A Bug's Life — Insects live in harmony and have their own hierarchy and tiny little cities.
- Monsters Inc. — Horrifying monsters live everyday lives in their own community. Scaring kids is just their day job.
- Finding Nemo — The ocean, like Earth's land mass, has its own cities, schools and communities ruled by fish.
- The Incredibles — Superheroes live among us and take ordinary jobs and have ordinary problems, such as a greedy boss or a troublemaking son.
John Ratzenberger (most widely known as the mailman character Clifford Clavin from the television sitcom Cheers) is always a character voice, referred to by the studio as their "good luck charm". The following is a list of his roles in the first seven Pixar movies:
- Toy Story — Hamm (a piggy bank)
- A Bug's Life — P.T. Flea (the manager of a travelling insect circus)
- Toy Story 2 — Hamm (a piggy bank)
- Monsters, Inc. — The Abominable Snowman (a yeti)
- Finding Nemo — a school of moonfish
- The Incredibles — The Underminer (A Supervillain)
- Cars — a Mack truck named Mack
He also voiced a character in the English dub of Spirited Away, overseen by John Lasseter. Actor Wallace Shawn also appears in multiple Pixar Films. He has become such a stable part of the company that he plays on its softball team.
Every Pixar film has included cameo appearances of characters or objects from their other movies or short films.
- Toy Story — During the staff meeting at the beginning of the movie, some of the books on the shelf behind Woody are named after some of Pixar's short films, such as "Tin Toy" and "Knick Knack".
- Toy Story 2 — When Hamm is flipping through the channels, many of Pixar's short films, including Pixar's old logo, were briefly represented. Geri (from the short Geri's Game) appears as the toy cleaner. There are "A Bug's Life" toys in Al's Toy Barn. Also, in that movie when Mr. Potato Head found Mrs. Potato Head's earring, Mrs. was reading "A Bug's Life" book. Right before the road crossing scene, the "bug bar" from A Bug's Life is visible in the bushes. In one of the outtakes during the end credits, Flik and Heimlich from "A Bug's Life" are accidentally swatted by Buzz, who doesn't see them.
- A Bug's Life — A Pizza Planet cup from Toy Story is seen above the bar as Flik enters.
- Monsters, Inc. — Boo shows Sulley her Jessie doll (from Toy Story 2) and a Nemo toy. In the same scene, a toy ball from the Luxo Jr. short. Also, the mobile home where Randall becomes trapped is the same one from "A Bug's Life". Sitting next to the trailer, as in "A Bug's Life", is the Pizza Planet truck. In one of the outtakes during the closing credits, Rex from Toy Story is seen auditioning for a part of the large monster (known as 'Ted') that Mike and Sully meet while crossing the street on the way to work in the beginning of the movie. When Randall is jettisoned from Monstropolis, you can briefly see Nemo from "Finding Nemo" mounted on the wall as a fishing trophy.
- Finding Nemo — A Buzz Lightyear action figure can be seen in the dentist's waiting room. Also, a patient can be seen reading a Mr. Incredible comic book. Mike Wazowski from Monsters, Inc. can been seen during the end credits swimming through the ocean. The Pizza Planet truck from "Toy Story" can be seen during Gil's 'escape from the tank' montage, as well as an early version of the character 'Luigi' from "Cars".
- The Incredibles — Mr. Incredible's desk lamp is Luxo Jr. In the scene with the self destructing message, the boxing game from Toy Story is on the shelf, to the left.
- Cars has many cameos:
- Lightning McQueen is equipped with Lightyear Buzzard tires, a parody of Goodyear Eagle Tires, and a reference to Buzz Lightyear from "Toy Story".
- Some of the racing cars in the teaser trailer have Toy Story 2 and A Bugs Life logos on the side as well as 'JLP' for John Lasseter, the director.
- Some of the sponsors on the sides of the cars seen in the trailer are references to past Pixar films, for example, '2319' is visible on a car. '2319' was the code of the Child Detection Agency in Monsters, Inc. when a monster came into physical contact with a human child.
- Lightning McQueen was named after auto-and-motorcycle racing legend Steve McQueen, as well as Glenn McQueen (December 24, 1960 – October 29, 2001), a directing animator who worked at Pixar on such films as Toy Story, A Bug's Life, Toy Story 2 and Monsters, Inc., but did not live to see Finding Nemo.
Similar to George Lucas' 1138, the letter-number sequence A113 is an animation in-joke which appears in all Pixar films to date. It is a reference to one of the room numbers at CalArts (which several of the employees attended).
The Pizza Planet Truck
The Pizza Planet Truck which featured prominently in Toy Story appears in each of the Pixar films. The truck is noticeable for only showing the letters "Yo" (the only letters left from the car's brand; "Gyoza", not "Toyota" as is commonly thought.) Examples:
- Toy Story: Buzz and Woody get to Pizza Planet in this truck.
- A Bug's Life: As the two bugs are talking about seeing the light, the truck can be seen on-screen.
- Toy Story 2: The toys steal and drive the truck to the airport.
- Monsters Inc.: At the end of the movie, Randall is thrown through a door and ends up in a caravan where he is mistaken for a gator. The caravan is next to the Pizza Planet truck.
- Finding Nemo: While the escape plan is being shown, as the bags of water cross the road, the truck drives past.
- The Incredibles: The Pizza Planet truck can be seen on the freeway towards the end of the film.
The Pixar teaser trailers since A Bug's Life consist of footage created specifically for the trailer, spotlighting certain central characters in a comic situation. Though similar scenes and situations may appear, these sequences are not in the films being advertised, but instead are original creations.
- A Bug's Life: All the insects from the circus troupe gather onto a leaf right before Heimlich bites the end of it off, causing them to fall.
- Toy Story 2: The green alien toys come up to a center with the claw coming down. First the claw was carrying down "Toy Story" with the aliens doing their trademark "Oooh". Second the claw brings down a "2" and with the aliens turning around and looking at the audience and saying "Twoooo". Then Woody and Buzz come up with a little greetings.
- Monsters, Inc.: Sulley and Mike stumble into the wrong bedroom. (Also, in a preview shown before the first Harry Potter film, Sulley is shown playing charades with Mike, but Mike is unable to guess the phrase 'Harry Potter'. The clip never specifically mentions Harry Potter, but the end states that Monsters, Inc. is playing right next door.)
- Finding Nemo: Marlin asks the school of fish for directions and Dory scares them away.
- The Incredibles: An out-of-shape Mr. Incredible struggles to get his belt on.
- Cars: Mater, a rusty tow truck talks to Lightning McQueen after hitting and killing a baby bumblebee.
Feature film inside references
- Alvy Ray Smith's Pixar History Page. Retrieved June 9, 2005.
- The Pixar Story. A history of Pixar, running from its origins and inspiration at Xerox PARC to success with Toy Story.
- Pixar Corporate FAQ. Retrieved June 9, 2005.
- The most accurate reporting on the creation of Pixar at Lucasfilm is the book "Droidmaker: George Lucas and the Digital Revolution" (2006).
- Pixar's web site
- Pixar Animation Studios at the Internet Movie Database
- Pixar Animation Studios at the Big Cartoon DataBase
- The Pixar Story: Dick Shoup, Alex Shure, George Lucas, Steve Jobs, and Disney, by Tom Hormby, January 23, 2006
- Pixar/Disney conference call (with audio)
- CNN's "Pixar dumps Disney"
- Wired Magazine: Welcome to Planet Pixar
- Pixar History
- The UK Register on Pixar
- Disney Buys Pixar for US$7 Billion