The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire? Executive Summary: 3D computer-generated (CG) models changed the way the animation industry worked. The traditional 2D animation used frames that were comprised of hand-drawn cels. These required skills of hundreds of people and it took a lot longer to make. On the other hand, 3D computergenerated required less people, films could be made much faster and at a fraction of competitor’s cost. If there was a change needed to be made to a character, 2D would need to change all its subsequent frames, but 3D had mathematical models to redraw each cel and mimic camera angles. Walt Disney is a company that had mastered the traditional 2D animation. Disney’s Feature Animation unit was known as an open, collaborative environment. Leadership relied on all employees to generate story ideas. “Some of the same features that observers credited for Disney Animations’ success – large staff, large budgets, and lots of time – were blamed for its demise” (pg. 2). In the late 1990s, Disney set up a lab to work on their first 3D CG film but it wasn’t as big of a success as their other movies. Because many staff members needed to be retrained for this new technology, movie releases were pushed back. Throughout this period, Disney relied on revenue and characters produced by a company who excelled in 3D CG animation, Pixar. Pixar used its own proprietary computer animation technology that generated incredibly lifelike 3D images and backgrounds. “Pixar’s technology allowed animators to manipulate hundreds of motion control points within a single character, to reuse animated images, and to edit easily” (pg. 4). By 2005, the Pixar team had won 20 Academy Awards. Disney and Pixar’s relationship began in 1986. The two studios collaborated on the development of Computer Animated Production Systems (CAPS), a production company