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How Pixar Became a Sequel Factory

‘Incredibles 2’ is Pixar’s sixth sequel this decade and another sign that the Silicon Valley startup that valued originality over all else has been changed by Hollywood

Pixar/Getty Images/Ringer illustration

Shortly after the release of Toy Story, at the end of 1995, John Lasseter and Steve Jobs had a meeting about the destiny of Pixar. Lasseter, the director of Toy Story and the creative nexus of the company, wanted Pixar’s filmmakers to have final say on all creative decisions. Jobs, the corporate owner who was more moneyman than muse, thought a business executive might need to steer the ship, as was customary at Disney and other Hollywood movie studios.

“We don’t want to make safe films. We want to keep breaking barriers in story and animation,” Lasseter said, according to a recent memoir by Pixar’s former chief financial officer Lawrence Levy, who was also present for the meeting. “We have ideas for incredible, original stories. It’s so rare to do original work. That’s what we can do. It’s what we have to do.”

Jobs was convinced, and Lasseter ultimately led Pixar to an unprecedented string of creative and commercial triumphs involving bugs, bedroom monsters, and a forgetful blue fish. As Hollywood bowed to the cold economic logic of expanded universes and exploitable IP, Pixar remained defiantly original. In its initial 10-film run, when even a single flop could have sunk the studio, Pixar released just one sequel.

This decade has been different. Pixar’s next 10 films included six sequels or prequels, among them the newly released Incredibles 2. Its next movie is Toy Story 4, an addendum to a conclusive trilogy that no one asked for. In addition to its two sequels, there has even been a Cars spinoff, Planes, which recalls the low-budget direct-to-video sequels Disney pumped out in the ’90s. (Pixar did not develop Planes but it was cowritten by Lasseter.) The movie studio that built a brand out of flouting convention has become bound to the machinery of it. Though it’s headquartered in Silicon Valley’s culture of innovation, Pixar feels more and more like the risk-averse Hollywood establishment.

Like many mythic stories about unprecedented success, Pixar’s origins are rooted in failure. The company began as a division of Lucasfilm, developing an expensive graphics imaging computer for use in movie production. Jobs, on the hunt for a second act after being ousted from Apple, spent $10 million to spin the division off as an independent company in 1986. Pixar wanted to make an animated feature film using computer graphics; Jobs wanted to prove he was still the king of hardware after the poor reception of the Macintosh. Ultimately the company pursued both tracks simultaneously, while also producing commercials and selling rendering software to raise revenue. It was the first time Pixar would have to balance its commercial interests with its creative ones.

The startup found a meager market for its offerings and continuously bled money. Jobs himself had to write monthly checks to keep the enterprise afloat. As the various business lines fizzled out, the fate of the company largely hinged on the success of its first major motion picture, Toy Story, and the IPO that would follow the very next week.

Toy Story was a marvel not only technologically, as the first computer-animated feature film, but also tonally. Disney’s resurgent animation studio had spent the ’90s developing dramatic parables like Aladdin and The Lion King, set in far-off lands and scored as kid-friendly musicals. They were timeless fairy tales like the ones Walt Disney created himself. Toy Story was something else — contemporary, subdued, just a little bit cynical. It was a movie for kids about toys who harbored the barely masked insecurities of adults. The computer-generated visuals were brand new, but so was the storytelling, captivating both audiences and investors. Pixar had the biggest movie of the year, and the biggest IPO too.

The success thrust Pixar into both the spotlight and the hot seat. As Levy explains in his memoir, To Pixar and Beyond, the company needed to prove it wasn’t a one-hit wonder to investors, moviegoers, and Disney, which served as a distribution partner and a creative rival during the studio’s rise. Sequels would have been the safest way to avoid a box-office dud. But Pixar spent the cultural and financial capital it was accruing on even more daring projects. After Toy Story, the studio renegotiated its distribution deal with Disney, ensuring full creative control for any of its directors whose previous films had earned more than $100 million at the box office.

Even as Pixar’s cast of iconic characters increased, it resisted sequels. After Finding Nemo became the second-highest-grossing animated film of all time in 2003, director Andrew Stanton could have launched into Finding Nemo 2. Instead he made WALL-E, a love story between two mostly silent robots set on an Earth destroyed by climate change and capitalist consumption. In a period when competitors were milking Shrek, Ice Age, and Madagascar for all they were worth, Pixar was using originality to create space for more originality. “We were valuing the upside of creative freedom over the downside of budgets and deadlines running off the rails due to creative mistakes,” Levy writes.

The years of WALL-E’s production, though, were some of the most tumultuous in Pixar’s history. As its deal with Disney was set to expire in 2004, Jobs and Disney CEO Michael Eisner had a falling out over the studio’s future. With Pixar preparing to set out on its own, Disney created a rival animation studio called Circle 7 (also known as “Pixaren’t”) that began developing sequels to Toy Story 2, Finding Nemo, and Monsters, Inc. These franchises would be fully monetized whether Pixar was involved or not.

It never came to that. In 2005, Robert Iger succeeded Eisner as the CEO of Disney and embarked on a plan to amass and exploit the world’s most iconic pop culture properties. He bought Pixar for $7.4 billion in 2006, the first in a series of shrewd acquisitions that has turned Disney into an unprecedented box-office behemoth. The rogue sequels were never made, but Toy Story 3, Monsters University, and Finding Dory were all eventually developed in-house at Pixar. Disney got what it had wanted in the first place.

Pixar executives say it wasn’t the Disney acquisition that caused the onset of sequelitis. Since the release of Toy Story, Pixar has been steadily increasing its output and has long known that sequels would be necessary to stabilize its business. In his book Creativity, Inc., Pixar cofounder Ed Catmull calls sequels “a sort of creative bankruptcy” but notes that the company had a long-term plan to eventually develop one sequel for every two original films (the ratio right now is the inverse). This strategy allows the company to assume even more risk on its original endeavors, Catmull argues. There’s a certain truth to that logic — if Pixar had released a critical and commercial flop like 2015’s The Good Dinosaur early in its run, it might not have survived. But Finding Dory, which came out seven months later and became a billion-dollar blockbuster, muffled the impact of that misstep.

Still, there’s clearly an internal ambivalence at Pixar about succumbing to the norms of Hollywood. “There was polite inquiry from Disney [about a Finding Nemo sequel],” Stanton, the director of both Finding Nemo and Finding Dory, said in a 2013 interview with the Los Angeles Times. “I was always ‘No sequels, no sequels.’ But I had to get on board from a VP standpoint. [Sequels] are part of the necessity of our staying afloat.”

Pixar has long seemed to exist on a creative plane outside the drudgery of profit-loss statements. The company’s brand — indeed, the entire Disney brand — is built on the notion that humans can engineer magic. But Pixar is a company staffed by mortals, not superheroes. Last year, Pixar, Disney, and Lucasfilm reached a $100 million settlement in a class-action lawsuit alleging that they used “anti-poaching” agreements to suppress animators’ wages (a common practice in Silicon Valley). Rashida Jones, a former writer for Toy Story 4, left the production because she believed women and people of color were not getting an “equal creative voice” at the company. And Lasseter, the chief creative officer for both Pixar and Disney’s animation studio, is leaving the company after accounts of unwanted grabbing and kissing of female subordinates. In these ways, Pixar seems disappointingly similar to its Hollywood counterparts, and American society writ large. The magic of the company’s fictional worlds doesn’t necessarily extend to its offices.

After Toy Story 4, due in June 2019, Pixar says it’s taking a break from sequels. The studio has tentatively set release dates for three original films in 2020 and 2021 (one will be a “modern suburban fantasy” where mystical creatures exist in a world without magic). Even if the company does decide to cash in on recent hits like Coco and Inside Out, those follow-ups wouldn’t be ready for years.

That leaves Pixar on the precipice of a curious new era. After a thrilling run of original hits and a middle age buoyed by sequels, the Pixar of the next decade will try to regain its original imaginative spark in a climate where only mega-franchises succeed. It will also be under new leadership — likely Pete Docter, the director of Up and Inside Out, who has been integral to Pixar’s success since Toy Story. And it will have to try to retain a culture distinct from Disney Animation, which has created two of the biggest original hits of the decade in Frozen and Zootopia.

Even now, though, amid the endless Cars and Toy Story films, Pixar is the studio whose original ideas are the most exciting to see brought to life. Last year’s Coco, about a young aspiring musician trying to chase his dreams and his family heritage on Dia de los Muertos, was a bittersweet reflection on familial connection and responsibility. The waterworks that have been streaming on Twitter since the film was added to Netflix are a testament to its emotional impact.

Too often today movies (especially Disney movies) use pop culture lore as a shortcut to human connection. A modern Marvel or Star Wars film is only as good as your interest in those commercial enterprises. But Coco does what Pixar does best by delving into core human experiences such as love, loss, and the joy of expression with an unknown cast of characters who, by the end of the film, feel like family. The studio may not always be able to manufacture magic at the whims of its corporate parent, but it’s still helping to preserve the little Hollywood has left.