A computer-graphics group became an independent studio

In 1986, Steve Jobs bought Lucasfilm’s computer-graphics division and made it an independent company called Pixar. The group had been developing advanced graphics technology, including computers and software, but selling the technology proved difficult. Pixar’s future depended on finding a use for its expertise that audiences—and buyers—would pay for.

That meant the company was not simply a film studio waiting to make a hit. It was a costly technology business trying to turn specialized tools and animation work into a sustainable enterprise. Its short films showcased what the computers could do, but they did not solve the problem of funding the company over the long term.

The long bridge to Toy Story

Jobs kept financing Pixar through years when its business struggled. Meanwhile, Pixar’s animators developed computer-generated storytelling, and the company entered a partnership with Disney to make a feature film. Toy Story grew out of that work: a full-length story whose characters and settings were created with computer animation rather than drawn by hand.

The technology mattered, but so did the gamble that audiences would care about the characters and story. Producing a feature required years of work before ticket sales could prove whether the approach had a future. Jobs’s investment gave Pixar room to attempt that leap; Disney’s involvement provided a route to make and distribute the film.

When Toy Story became a success in 1995, Pixar was no longer just a graphics company with an expensive ambition. It had demonstrated that computer animation could carry a feature film—and the unlikely path from a division of Lucasfilm to a landmark movie suddenly made commercial sense.