Modern animation in the United States

At the start of the 1980s, The Walt Disney Company had been struggling since Walt Disney's death in 1966, and the 1979 departure of Don Bluth and eleven other associates from the animation department dealt Disney a major blow. Bluth formed a new studio, in direct competition with Disney.

Disney's "Nine Old Men", the animators responsible for Disney's most famous earlier works, and their associates began to hand their traditions down to a new generation of Disney animators. New faces such as Glen Keane, Ron Clements, John Musker, Andreas Deja, and others came to the studio in the late 1970s and early 1980s, a period that produced such features as The Rescuers, Pete's Dragon (a live-action/animation hybrid), and The Fox and the Hound, as well as the featurettes The Small One (Bluth's only Disney-directed credit) and Mickey's Christmas Carol (the first screen appearance of Mickey Mouse since 1953).

At the same time, animator Steven Lisberger brought to the studio a concept about a computer programmer who is launched into a computerized world. The film would mix live action sequences with computer animation, which had not yet been used to such an extent. The studio was impressed with the idea; the result was an ambitious $17 million film ($45 million in today's dollars)[1] entitled Tron. While Disney's stock dropped four percent after a screening for unenthusiastic investment analysts,[2] and in spite of only moderate grosses at the box office,[3] Tron received enthusiastic praise from film critic Roger Ebert,[4] became a cult favorite and turned out—many years later—to have a greater influence on animation (at Disney and elsewhere) than expected.

In 1984, Disney became the target of a corporate raid by Saul Steinberg, who intended to break up the company piece by piece. At the same time, Roy E. Disney, who had already resigned as President in 1977, relinquished his spot on the Board of Directors to use his clout to change the status quo and improve the company's declining fortune. Disney escaped Steinberg's attempt by paying him greenmail, but in its aftermath CEO Ron W. Miller resigned, to be replaced by Michael Eisner. Roy Disney, now back on the Board as its Vice-Chairman, convinced Eisner to let him supervise the animation department, whose future was in doubt after the disappointing box office performance of its big-budget PG-rated feature, The Black Cauldron.[5] The studio's next release, The Great Mouse Detective, fared better in relation to its significantly smaller budget, but it was overshadowed by Don Bluth's An American Tail,[6] another film featuring mice characters that competed directly with Mouse Detective in theaters.

In 1988, the studio collaborated with Steven Spielberg and Robert Zemeckis, producing Who Framed Roger Rabbit, a comedic detective caper that mixed live-action and animation while paying homage to the Golden Age of Cartoons. Disney characters appeared with characters from Warner Bros., Metro-Goldwyn-Mayer, Universal Pictures and other rival studios for the first time in animation history. The film was a huge box-office success, winning four Academy Awards, reviving interest in animation made for theaters, and popularizing the in-depth study of the history and techniques of animation. Several aging legends in the business, such as Chuck Jones and Friz Freleng, suddenly found themselves the center of attention, receiving acclaim and accolades after decades of being virtually ignored by audiences and industry professionals alike. Additionally, the release of many older Disney features and short cartoons on home video, and the 1983 launch of the Disney Channel, renewed interest in the studio.

Disney followed up Who Framed Roger Rabbit and its commercially successful[7] 1988 fully animated feature Oliver & Company with The Little Mermaid, an adaptation of the Hans Christian Andersen fairy tale with songs by Broadway composers Alan Menken and Howard Ashman. Mermaid was a huge critical and commercial success, won two Academy Awards for its song score, and became the first of a series of highly successful new Disney animated features.

The studio invested heavily in new technology, creating the Computer Animation Production System to be used in tandem with traditional animation techniques. The first film to use this technology, The Rescuers Down Under, only grossed $27,931,461[8] ($54.7 million in today's dollars), not even equalling the take of the original 1977 film.[9]

However, the films that followed it, Beauty and the Beast and Aladdin, won rave reviews, received multiple Oscars, and topped the box office charts. Beauty and the Beast would eventually become the first animated feature to win the Golden Globe Award for Best Motion Picture - Musical or Comedy and the first animated feature to be nominated for the Academy Award for Best Picture, followed by 2009's Up.

In 1993, Disney released The Nightmare Before Christmas, the first feature-length stop-motion animated film. Disney's success peaked in 1994, when The Lion King grossed $328,541,776 ($567 million in today's dollars). As of 2010, The Lion King ranked as the 22nd highest grossing motion picture of all time in the United States.[10] Subsequent Disney films such as Pocahontas, The Hunchback of Notre Dame, Hercules, Mulan, Tarzan, and Fantasia 2000 were box office and critical successes as well, albeit modestly so when compared to Disney's early-1990s releases.

In 1994, the death of Disney President and Chief Operating Officer Frank Wells, and the departure of studio chairman Jeffrey Katzenberg to co-found DreamWorks, left Michael Eisner in full control of the company. At the turn of the century, films such as Atlantis: The Lost Empire, Treasure Planet, and Home on the Range failed to meet the critical and commercial expectations set by the 1990s phenomena, in spite of exceptions such as Lilo & Stitch and The Emperor's New Groove. At the same time, the high level of popular acclaim bestowed upon Toy Story, the first film animated entirely using computer-generated imagery (CGI), sparked an industry trend. Based on the commercial success of Pixar's computer-generated animated films and other CGI fare (especially DreamWorks' Shrek, which contained numerous jabs at Katzenberg's former workplace and boss), Disney came to believe that CGI was what the public wanted—so it ceased producing traditional two-dimensional animation after Home on the Range, and switched exclusively to CGI starting with 2005's Chicken Little.

Public rifts grew between the animation staff and management, as well as between Michael Eisner and Roy E. Disney. Roy resigned from the board of directors in 2003 with a scathing letter that called the company "rapacious and soulless", adding that he considered it to be "always looking for the quick buck."[11] He then launched the internet site SaveDisney.com[12] in an attempt to preserve the integrity of the company and to oust Eisner, who resigned in 2005 after public opinion turned against him. [13]

Robert Iger succeeded Eisner; one of his first acts as CEO was to regain the rights to Walt Disney's first star Oswald the Lucky Rabbit from NBCUniversal (Iger did so by offering NBC the services of Al Michaels, a play-by-play host then under contract to Disney subsidiary ABC Sports, as a trade). After Disney's acquisition of Pixar in 2006, Pixar executive producer John Lasseter became Chief Creative Officer at both Pixar and Disney, with a plan to reintroduce two-dimensional animation, starting with The Princess and the Frog in 2009.

After 30 years of resisting offers to produce television animation, Disney finally relented once Michael Eisner, who had a background in TV, took over. The first TV cartoons to carry the Disney name, CBS' The Wuzzles and NBC's Disney's Adventures of the Gummi Bears, both premiered in the fall of 1985. Breaking from standard practice in the medium, the productions enjoyed substantially larger production budgets than average, allowing for higher-quality writing and animation, in anticipation of recouping profitably in rerun syndication. While The Wuzzles only lasted a season, The Gummi Bears was a sustained success with a six-season run.

In 1987, the TV animation division adapted Carl Barks' Scrooge McDuck comic books for the small screen with the syndicated hit DuckTales. Its success spawned a 1990 theatrical film entitled DuckTales the Movie: Treasure of the Lost Lamp and an increased investment in syndicated cartoons. The result of this investment was The Disney Afternoon in 1990, a two-hour syndicated television programming block of such animated shows as: The New Adventures of Winnie the Pooh (1988-1991), Chip 'n Dale Rescue Rangers (1989–1991), TaleSpin (1990–1991), Darkwing Duck (1991–1993, also airing on ABC), Goof Troop (1992–1994, also airing on ABC), Bonkers (1993–1994), Marsupilami (1993–1995), the critically acclaimed and still-popular Gargoyles (1994–1997), and Pepper Ann (1997–2000). TV animation also brought some animated feature film characters to Saturday morning, including The Little Mermaid, Aladdin, Timon & Pumbaa, and Hercules, the first three on CBS.

DisneyToon Studios was founded in Paris in the late 1980s to produce DuckTales the Movie: Treasure of the Lost Lamp, which is not considered by the studio to be part of the Disney animated "canon".[14] The practice of making non-canon direct-to-video sequels to canon films began in 1994 with The Return of Jafar, a sequel to Aladdin. This was a reversal of the long-standing studio policy against sequels to animated films (which did not apply to live-action films); Walt Disney has often been quoted on the subject as saying "you can't top pigs with pigs", a reference to how the Three Little Pigs short managed to get more than three sequels.[15] Because of strong video sales, the studio continued to make these films in spite of negative critical reaction; 2002's Cinderella II: Dreams Come True received a rare 11% rating from the review-aggregating website Rotten Tomatoes.[16]

Under John Lasseter, the studio has brought this practice to an end.[17][18]

DisneyToon also produced several non-canon entries that did receive theatrical releases, such as A Goofy Movie and The Tigger Movie. The latter brought the Sherman Brothers back to the studio for their first Disney feature film score since Bedknobs and Broomsticks in 1971.

Don Bluth's company had been driven to bankruptcy twice: once, as Don Bluth Productions, after the disappointing box office take of The Secret of NIMH coincided with an animator's strike; and again, as the Bluth Group, after the Video game crash of 1983—when Cinematronics, in an attempt to cut its losses, charged fees and royalties of over $3 million ($7.38 million adjusted for inflation) to Bluth's company while it was working on a sequel to the laserdisc-based animated arcade videogame Dragon's Lair.

Bluth formed Sullivan Bluth Studios with backing from businessman Morris Sullivan, while film director Steven Spielberg—a long-time animation fan who was interested in producing theatrical animation—helped Bluth to produce 1986's An American Tail. The film was a hit, grossing $47,483,002 ($111 million in today's dollars).[19] During its production, the studio relocated to Ireland, taking advantage of government tax breaks for film production. Bluth's 1988 follow-up The Land Before Time was a slightly bigger hit, grossing $48,092,846 ($104 million in today's dollars)[20] and spawning 12 sequels and a TV series. Neither Bluth nor Spielberg were involved with any of the Land Before Time sequels; Spielberg produced the 1991 sequel An American Tail: Fievel Goes West without Bluth.

To gain more creative control, Bluth parted company with Spielberg on his next film, the 1989 release All Dogs Go to Heaven. While the film had the misfortune of opening the same day as Disney's The Little Mermaid, it fared much better on home video.[21]

The early 1990s were difficult for the studio; it released several box office failures. In 1992, Rock-a-Doodle was panned by critics and ignored by audiences; its dismal box-office performance of $11,657,385 ($21.2 million in today's dollars)[22] contributed to Sullivan Bluth's bankruptcy. Bluth's next feature, 1994's Thumbelina fared a little better critically but even worse commercially, while A Troll in Central Park, also released in 1994, barely got a theatrical release, grossing $71,368 against a budget of $23,000,000 (or $123 thousand against $39.7 million in current terms).[23] Bluth and his partner Gary Goldman pulled out of 1995's The Pebble and the Penguin before it was completed due to disagreements with its distributor, Metro-Goldwyn-Mayer. The remaining work needed to complete the film—thirty percent of the total—was finished by a Hungarian studio, and Bluth and Goldman took their names off the film.

Sullivan Bluth Studios closed in 1995. Bluth and Goldman returned to the United States a year earlier to discuss the creation of a feature-animation division at 20th Century Fox; the studio's three previous animated films (FernGully: The Last Rainforest, Once Upon a Forest, and the live-action/animation combo The Pagemaster) had all failed. Anastasia, a musical remake of the 1956 film with Ingrid Bergman, did far better than any Bluth film since All Dogs Go To Heaven,[24] but the 2000 release of Titan A.E., a film far different from the ones Bluth had been making up until then, was a flop. Fox Animation Studios closed soon afterwards; nearly all Fox feature animation was produced by its Blue Sky Studios unit until the Fox Animation Studios imprint was revived, without Bluth or Goldman, in 2009.

After parting ways with Bluth, Spielberg turned to television animation, working with the Warner Bros. Entertainment Co. to bring back its animation department, which it had abandoned in the 1960s. A team of former Hanna-Barbera employees led by Tom Ruegger formed a new studio, Warner Bros. Animation, to produce Tiny Toon Adventures, an animated series that paid homage to the Warner Bros. cartoons of Termite Terrace. The popularity of Tiny Toon Adventures among young TV viewers made the studio a contender once again in the field of animated cartoons. Tiny Toon Adventures was followed by Steven Spielberg Presents Animaniacs and its spinoff Pinky and the Brain. Not only did these cartoons bring in new viewers to Warner Bros., but they also captured the attention of older viewers. Warner Bros., minus Spielberg, continued with work such as Batman: The Animated Series. Batman quickly received wide acclaim for its animation and mature writing, and it also inspired a feature film. Combined, these four Warner Bros. series won a total of 17 Daytime Emmy Awards.

When Disney's feature animation surged in the 1990s, Warner Bros. tried to capitalize on their rival's success with animated feature films of their own, without the assistance of Spielberg. Their films—Cats Don't Dance, Quest for Camelot and The Iron Giant—failed to come close to Disney's success, although Cats Don't Dance and The Iron Giant both received critical praise and developed cult followings. The 2001 live-action/animation hybrid Osmosis Jones, starring Bill Murray, was a costly commercial failure,[25] although its home video performance proved successful enough for the studio's TV animation department to produce a short-lived spin-off series called Ozzy and Drix.

The perennially-popular Looney Tunes characters made a comeback. While the older shorts continued to enjoy countless reruns and compilation specials (and a few compilation films), new Looney Tunes short features were made in the 1990s. Inspired by the success of Disney's Who Framed Roger Rabbit and a series of Nike and McDonald's commercials teaming the characters with basketball superstar Michael Jordan, the studio produced the live-action/animation combo Space Jam in 1996. The film received mixed reviews, but was a major commercial success.[26] However, another 2003 feature, Looney Tunes: Back in Action, was a box-office flop, grossing about three-quarter of its $80 million budget worldwide ($111 million in current terms),[27] but received more positive critical reviews. Other modern Looney Tunes projects were in a different vein. Unlike the original shorts, Taz-Mania (1991-1995) and Baby Looney Tunes (2001-2006) were aimed primarily at young children, while Loonatics Unleashed (2005-2007) was a controversial revamping of the characters in the distant future. The Sylvester and Tweety Mysteries (1995-2000) and Duck Dodgers (2003-2005) were very well received shows and were relatively more faithful to the original shorts. The Looney Tunes Show (2011-2014) was a modern more adult-oriented sitcom and Wabbit: A Looney Tunes Production (2015-2020) was a modernized series of Bugs Bunny shorts in the Looney Tunes tradition, but both shows still got a slightly better reception from audiences than Baby Looney Tunes or Loonatics Unleashed.

Ralph Bakshi, director of ground-breaking animated films like Fritz the Cat and the original Lord of the Rings film, returned to animation after taking a short break in the mid-1980s. In 1985, he teamed up with young Canadian-born-and-raised animator John Kricfalusi to make a hybrid live-action/animated music video for The Rolling Stones' The Harlem Shuffle, which was released in early 1986.

The music video put together a production team at Bakshi Animation whose next project was the short-lived TV series Mighty Mouse: The New Adventures. Bakshi and company worked on several other projects in the late 1980s, but his biggest project, 1992's Cool World, was a critically panned commercial disappointment.[28] In 2005, Bakshi announced that he would begin working on another feature film, Last Days of Coney Island, which he is financing himself and producing independently. Bakshi suspended production on the film in 2008,[29] but resumed in 2013 after a successful Kickstarter campaign.[30]

The major reason for the increase in the quantity of American animation was the ability to outsource the actual physical animation work to cheaper animation houses in countries in South and Southeast Asia. Writing, character design, and storyboarding would be done in American offices. Storyboards, model sheets, and color guides would then be mailed overseas. This would sometimes cause troubles as none of the final product would be seen until the completed cels were mailed back to the United States.

While budget became much less of an issue, overseas production houses would be chosen on a per-episode—or even per-scene—basis depending on the amount of money that was available at the moment. This resulted in obviously different levels of quality from episode to episode. This was particularly noticeable in shows like Gargoyles and Batman: The Animated Series, where at times characters would appear wildly off-model, requiring scenes to be redone to the dismay of their directors.

The late 1980s and 1990s saw huge changes in the Saturday-morning landscape. By now, the once-prosperous Hanna-Barbera Productions was beleaguered by several factors. First of all, its dominance over the networks' schedules was broken by other studios' shows. Second, when The Smurfs was cancelled by NBC in 1990, Hanna-Barbera had no other hits on the air. Finally, its ability to successfully exploit older characters like The Flintstones and Scooby-Doo with new shows was coming to an end; Scooby-Doo would end a near-continuous 22-year first-run after its most recent juniorized version, A Pup Named Scooby-Doo, ended its run in 1991. The 1990 theatrical release of Jetsons: The Movie was a success for the fading studio and earned $20 million ($39.1 million in today's dollars).[31] In 1987, Great American Insurance Company owner Carl Lindner Jr. became the majority shareholder of Hanna-Barbera's parent company, Taft Broadcasting, renaming it Great American Communications.

Great American wanted out of the entertainment business, and Hanna-Barbera was sold to the Turner Broadcasting System in 1991. Ted Turner had expressed that he mainly wanted ownership of the studio's back catalog; its launch of Cartoon Network on October 1, 1992 provided a new audience for Hanna-Barbera cartoons, both old and new.

In 1989, producer Tom Ruegger had led an exodus of Hanna-Barbera staffers to restart Warner Bros. Animation. At first, the studio was constantly under threat of closure.[32] However, under Fred Seibert's guidance, Hanna-Barbera's new staff (whose ranks included Seth MacFarlane, Butch Hartman, and Genndy Tartakovsky) created a new generation of Hanna-Barbera cartoons in the 1990s such as 2 Stupid Dogs, Dexter's Laboratory, Johnny Bravo, Cow and Chicken, I Am Weasel and The Powerpuff Girls. Alongside these Hanna-Barbera cartoons, shows from other companies also premiered on the channel such as Space Ghost Coast to Coast, Ed, Edd n Eddy and Courage the Cowardly Dog. These shows were designed to appeal to adults as well as children, and thus incorporated plenty of "adult humor", such as pop-culture references and veiled sexual innuendos.

Time Warner acquired Turner in 1996, and thus inherited the rights to all of Hanna-Barbera's creative properties. This allowed Cartoon Network to begin airing all of the classic Looney Tunes shorts as well (previously, Turner had owned only the Looney Tunes shorts produced before August 1948, which had become part of the MGM/UA library).[33] Cartoon Network's success with original programming lead them to move the reruns of old Hanna-Barbera and Looney Tunes cartoons to their spin-off channel Boomerang.

In 1997, Fred Seibert left Hanna-Barbera to found his studio.[34] In 1998, Hanna-Barbera moved to the same building as Warner Bros. Animation; the use of the Hanna-Barbera name for new productions ended with William Hanna's death in 2001. Hanna and Barbera continued to work as Time Warner employees and consultants until their respective deaths in 2001 and 2006; the name is still used for productions based on properties created during the Hanna-Barbera era. Cartoon Network Studios now handles most original animation for the network.

In 1991, Nickelodeon introduced The Ren & Stimpy Show. Ren & Stimpy was a wild and off-beat series that violated all the restrictions of Saturday morning cartoons, instead favoring the outrageous style of the shorts from the Golden Age period. The series' creator, John Kricfalusi—a Ralph Bakshi protege—was largely influenced by the classic works of Bob Clampett. Despite the show's popularity, the show was beset with production delays and censorship battles with Nickelodeon, which fired Kricfalusi in 1992. The show continued under the production of the network-owned Games Animation company until 1996, though many animators departed with Kricfalusi. TNN revived the show in a more risqué form in 2003, with Kricfalusi receiving more creative freedom, but it only lasted ten episodes.

Nickelodeon also gave birth to hit shows such as Doug, Rugrats, Rocko's Modern Life, Hey Arnold!, The Angry Beavers, CatDog, SpongeBob SquarePants, The Loud House and Avatar: The Last Airbender. Many of these shows spawned successful theatrical films as well, most notably Rugrats (which garnered 3 films), SpongeBob SquarePants (which has garnered 2 theatrical films and several TV movies) and Avatar: The Last Airbender (which garnered both a sequel series and a live action film.)

The Disney Channel switched from pay-cable to basic cable in the late 1990s, and launched several successful animated shows such as The Proud Family and Kim Possible. Around the same time, it launched Toon Disney, a channel specifically intended for animation (which has since been replaced by Disney XD). Their current most successful series are Phineas and Ferb, Gravity Falls, Wander Over Yonder, and Star vs. the Forces of Evil.

On cable TV, Nickelodeon, the Disney Channel, and the Cartoon Network grew to a point where they were competitive with the broadcast networks.

As the 1990s began, the "Big Three" networks (ABC, NBC, and CBS) were no longer a three-way oligopoly. The fledgling Fox network launched their Fox Kids programming block on weekdays and Saturdays in 1990, while The WB joined the competition with a kid's programming block shortly after the network's 1995 launch.

When NBC compared the success of the live-action youth sitcom Saved by the Bell to the paucity of their animated hits, they gave up on cartoons in 1992, instead concentrating on live-action teenage shows with their Saturday-morning TNBC block. ABC was purchased by Disney in 1996, and Disney transformed ABC's Saturday schedule into a series of Disney-produced animated cartoons collectively named One Saturday Morning. CBS was simply never able to come up with any new hits once the shows that anchored its late 1980s/early 1990s Saturday morning lineup—Muppet Babies, Teenage Mutant Ninja Turtles, Garfield and Friends, etc.—ran their respective courses. When CBS was purchased by Viacom, which also owned Nickelodeon, Viacom simply repurposed much of the Nick Jr. lineup—in addition to adding a Saturday edition of the CBS morning-news program The Early Show.

As a result of years of activism by Action for Children's Television and others against shows they believed blurred the line between entertainment and advertising, the Children's Television Act was passed in 1990. It began to be strictly enforced in 1996. The Federal Communications Commission began requiring three hours a week of educational and informational program intended explicitly for children, at times when children were awake. Since this required three hours to be "off-limits" to programs aimed at the general public, the networks naturally chose to air them on Saturday morning, when children were already watching. As a result, almost every Saturday-morning network show is required to contain some educational content. Fox and The WB worked around this problem by airing short one-hour weekday children's blocks instead of morning news shows, but those weekday blocks no longer exist (with the notable exception of PBS, which continues to have large weekday children's programming blocks as of 2010). Nonetheless, there were still a few toy-based children's programs in the 1990s, particularly Power Rangers and Pokémon.

Cable networks were not subject to these—or most other—FCC requirements, which allowed their series to have more leeway with content than network shows. The impact of the new regulations was almost instantaneous: by 1997, Nickelodeon had rocketed past its broadcast competitors to become the most-watched network on Saturday mornings.[35]

In 1987, "The Simpsons", an animated short cartoon segment of The Tracey Ullman Show, debuted. Matt Groening's creation gained its own half-hour series in 1989, the first prime-time animated series since The Flintstones. Although 70 percent of the first episode's animation had to be redone, pushing the series premiere back three months, it became one of the first major hit series for the fledgling Fox network. The Simpsons caused a sensation, entering popular culture and gaining wide acclaim for its satirical handling of American culture, families, society as a whole, and the human condition.

The show has won dozens of awards, including 24 Emmy Awards, 26 Annie Awards and a Peabody Award. Time magazine's December 31, 1999 issue named it the 20th century's best television series. A film version grossed over half a billion dollars worldwide.[36] On February 26, 2009, Fox renewed The Simpsons for an additional two years, "...which will secure its place as TV's longest-running prime-time series."[37] Its 21st season began on September 27, 2009, breaking the 20-season record it once shared with Gunsmoke.[37]

The success of The Simpsons led Fox to develop other animated series aimed at adults, including Bob's Burgers, King of the Hill (created by Mike Judge), Futurama (also by Groening), Family Guy, American Dad! and The Cleveland Show (all created by Seth MacFarlane). King of the Hill was an instant success, running 13 seasons. Both Futurama and Family Guy were cancelled by the network; after strong DVD sales and ratings in re-runs, both returned to the air—Family Guy on Fox, and Futurama on Comedy Central.[38]

In 1989, a festival of animation shorts, organized by Craig "Spike" Decker and Mike Gribble (known as "Spike & Mike") and originally based in San Diego, began showcasing a collection of short subject animated films. Known as the Classic Festival of Animation, it played in theatrical and non-theatrical venues across the country.

The collections were largely made up of Oscar-nominated shorts, student work from the California Institute of the Arts, and experimental work funded by the National Film Board of Canada. Early festivals included work by John Lasseter, Nick Park, Mike Judge, and Craig McCracken. Judge's piece, Frog Baseball, marked the first appearance of his dimwitted trademark characters Beavis and Butt-head, while McCracken's short The Whoopass Girls in A Sticky Situation featured the introduction of the trio of little girl superheroes that would later gain popularity under their new moniker The Powerpuff Girls.

The festival gradually turned into a program of films called Spike and Mike's Sick and Twisted Festival of Animation, an underground movement for adult humor and subject matter.

In 1994, the U.S. cable television network Cartoon Network approved a new series entitled Space Ghost: Coast to Coast. In a particularly postmodern twist, this show featured live-action celebrity interviews mixed with animation from the original Space Ghost cartoon. It was the beginning of the now common practice of using old Hanna-Barbera cartoon characters for new edgier productions, such as the surrealistic Sealab 2021, based on the short-lived early 1970s environmentally themed cartoon Sealab 2020. Harvey Birdman, Attorney at Law was about a lackluster superhero, Birdman—originally the star of Birdman and the Galaxy Trio—who has become a lawyer. His clientele, as well as most of the other characters on the show, are made up entirely of old Hanna-Barbera characters.

Adult Swim, a scheduling block of adult-oriented cartoons appearing on Cartoon Network beginning after primetime, premiered in 2001. Originally limited to Sunday nights, as of 2018, Adult Swim now remains on the air every night until 6:00 a.m. Eastern time. Animated series produced exclusively for Adult Swim include The Brak Show, Aqua Teen Hunger Force, Sealab 2021, Harvey Birdman: Attorney at Law, The Venture Bros., Perfect Hair Forever, Stroker and Hoop, Tom Goes to the Mayor, Robot Chicken, Rick and Morty and Metalocalypse. In addition to western animation, Adult Swim also runs popular anime series such as Cowboy Bebop, Ghost in the Shell, Eureka Seven, the Fullmetal Alchemist series, Bleach, and InuYasha.

Other TV networks also experimented with adult-oriented animation. MTV produced several successful animated series especially for its young adult audience, including Liquid Television, The Brothers Grunt, Æon Flux, Beavis and Butt-head (and its spin-off Daria), and Celebrity Deathmatch. USA Network's Duckman, starring the voice of Jason Alexander, found a cult following.

Another successful adult-oriented animated series was Comedy Central's South Park, which saw its beginnings in 1995 with the short cartoon The Spirit of Christmas. Like The Simpsons, Beavis and Butt-head and South Park were given the big-screen treatment as Beavis and Butt-head Do America and South Park: Bigger, Longer and Uncut both of which met with box office success.

The most popular and successful competitor in the CGI race turned out to be Pixar. It originated in 1979 when George Lucas' Lucasfilm was able to recruit Edwin Catmull from the New York Institute of Technology to start the Graphics Group of its special-effects division. In late 1983, Catmull was able to bring in as a freelance independent contractor a Disney animator, John Lasseter, not long after Lasseter (then unbeknownst to Catmull) had been fired by the Walt Disney Company for his vigorous advocacy of computer animation; Lasseter was hired as a full-time employee about a year later.

Lucas experienced cash flow issues after his 1983 divorce, and in 1986 Pixar was spun off from Lucasfilm as a separate corporation with $10 million in capital from Apple Computer co-founder Steve Jobs. At that time, Pixar primarily developed computer animation hardware, but Lasseter helped the company make a name for itself by creating acclaimed CGI short films such as The Adventures of André and Wally B. (1984). After the spin-off, he would go on to produce Tin Toy (1988), which won an Oscar. The company transitioned into TV commercial production and projects such as the Computer Animation Production System for Disney. After the success of Tin Toy, Pixar made a deal with Disney to produce feature films. The first of these films, 1995's Toy Story, was a smash hit, which in turn led to additional successful films such as A Bug's Life and Toy Story 2. By then, Jobs had become the owner of Pixar by keeping it alive with additional investments over the years; he had often considered selling it but changed his mind after Toy Story.

Pixar's string of critical and box-office successes continued with Monsters, Inc., Finding Nemo, The Incredibles, Cars, Ratatouille, WALL-E, Up and Toy Story 3 all receiving rave reviews, earning huge profits, winning awards, and overshadowing Disney's in-house offerings until Cars 2 in 2011 ended the streak when it proved a critical disappointment, albeit still a commercial success. Disney produced a CGI/live-action feature film of its own without Pixar (Dinosaur), but the film received a mixed reaction, even though it was a financial success. During the later years of Michael Eisner's management, friction between Disney and Pixar grew to a point that Pixar considered finding another partner when they could not reach an agreement over profit sharing.[40] When Eisner stepped down in 2005, his replacement, Robert Iger, arranged for Disney to buy Pixar in a $7.4 billion all-stock deal ($9.69 billion in today's dollars) that turned Steve Jobs into Disney's largest individual shareholder.[41] The deal was structured so that Disney Animation and Pixar Animation would continue to operate as completely separate studios under the Disney corporate umbrella; Lasseter was placed in charge of greenlighting all-new animated films for both studios in his new role as Chief Creative Officer.

When Jeffrey Katzenberg left Disney to become a co-partner of Steven Spielberg and David Geffen in the new studio DreamWorks Pictures, the studio naturally became interested in animation. Its first film, Antz, did not do as well as the Disney-Pixar releases but was a critical success. However, DreamWorks succeeded in its partnership with the British stop motion animation studio Aardman Animations with Chicken Run in 2000, and later the Oscar-winning Wallace and Gromit: The Curse of the Were-Rabbit in 2006.

Furthermore, DreamWorks finally had their own success in 2001 with the computer animated feature film Shrek, a gigantic box-office hit that overpowered Disney's summer release for that year, Atlantis. Shrek established DreamWorks as Disney's first major competitor in feature-film animation. DreamWorks' commercial success continued with three Shrek sequels, Shark Tale, Madagascar, Bee Movie, Kung Fu Panda, Monsters vs. Aliens, How to Train Your Dragon and The Croods. DreamWorks Animation eventually became a separate company from its parent; it is now owned by Universal Studios through its parent company NBCUniversal/Comcast as of 2016.

In 2003, noting the growing success of studios that relied on computer animation, executive Bob Lambert[42] announced Walt Disney Feature Animation would be converted into a CGI studio.

Two years later, Chicken Little, the first computer-animated film from the studio, was released to moderate success in the box office and mixed critical reception. On January 24, 2006, Disney announced that it would be acquiring Pixar (the deal successfully closed that May),[43] and as part of the acquisition, executives Edwin Catmull and John Lasseter assumed control of Walt Disney Feature Animation as President and Chief Creative Officer, respectively.[44] Lasseter later acknowledged that there had been discussions back in 2006 about closing Feature Animation as redundant since Disney now owned Pixar, which he and Catmull flatly rejected ("Not on our watch. We will never allow that to happen."); they resolved to try to save Walt Disney's creative legacy by bringing his animation studio "back up to the creative level it had to be".[45][46]

To maintain the separateness of Disney and Pixar (even though they share common ownership and senior management), it was outlined that each studio is to remain solely responsible for its own projects and is not allowed to borrow personnel from or lend tasks out to the other.[47][48]

In 2007, the studio released Meet the Robinsons, which experienced a poor response at the box office despite the lukewarm critical and audience reception. The following film, 2008's Bolt, had the best critical reception of any Disney animated feature since Lilo & Stitch, and became a moderate success. An adaptation of the Brothers Grimm's "Rapunzel" tale entitled Tangled was released in 2010, earning $591 million in worldwide box office revenue, and signified a return by the studio to fairytale-based features common in the traditional animation era. This trend was followed in 2013's global blockbuster hit Frozen, a film inspired by Hans Christian Andersen's The Snow Queen tale, which released to widespread acclaim and was the first Disney animated film to earn over $1 billion in worldwide box office revenue[49][50][51] and is currently the highest-grossing animated film of all time, surpassing Pixar's Toy Story 3. Frozen also became the first film from Walt Disney Animation Studios to win the Academy Award for Best Animated Feature Film.[52] They also had critical and commercial success with Oscar winner Big Hero 6, Zootopia and Moana alongside (following in Pixar's footsteps) their own animated shorts Feast and Paperman; the latter shown before Wreck It Ralph.

Other studios attempted to get into the CGI game. After ending its relationship with Don Bluth, 20th Century Fox released a hugely successful CGI-animated feature in early 2002 entitled Ice Age, as the first full-length feature film under Blue Sky Studios. In 2001, Paramount offered Jimmy Neutron: Boy Genius, TWC offered Hoodwinked! in 2005, and Columbia produced Open Season in 2006. Warner Brothers had a major success in 2006 with the Oscar-winning feature film, Happy Feet, while Sony produced films under Sony Pictures Animation including Open Season in 2006, Surf's Up in 2007, and the successful film franchises Cloudy with a Chance of Meatballs and Hotel Transylvania which began in 2009 and 2012, respectively. Universal Studios attempted several times to become a viable participant in the market, finally achieving the goal in 2010 with Despicable Me, the first feature film from Illumination which provided more hits for them within the following decade. STX Entertainment offered UglyDolls in 2019.

Despite all its success, computer animation still relies on cartoon and stylized characters. 2001 saw the first attempt to create a fully animated world using photorealistic human actors in Final Fantasy: The Spirits Within, which met with moderate critical success but did not do well at the box office.

In 2004, the live-action film Sky Captain and the World of Tomorrow was released. It was notable for being filmed entirely in front of a bluescreen, with the background being completely computer-generated; only the actors and some props were real. Robert Zemeckis' film The Polar Express, starring Tom Hanks in five roles, was completely CGI animation but used performance capture technology to animate the characters. Zemeckis followed The Polar Express with two other motion capture films: Beowulf and Disney's A Christmas Carol.

The use of CGI special effects in live-action film increased to the point where George Lucas considered his 2002 film Star Wars: Episode II – Attack of the Clones to be primarily an animated film that used real-life actors. A growing number of family-oriented films began to use entirely computer-generated characters that interacted on the screen with live-action counterparts, such as Jar-Jar Binks in Star Wars: Episode I – The Phantom Menace, Gollum in The Lord of the Rings: The Two Towers and the title character of Hulk. While computer-generated characters have become acceptable to moviegoers, there have yet to be any fully animated films featuring virtual human actors, or "synthespians".

Historically, despite the continuation of the Best Animated Short Subject category, animated feature films seldom received much recognition from the Academy Awards for anything other than musical scores. The unprecedented nomination of Disney's Beauty and the Beast for Best Picture and five other awards changed things, even though it only won two Oscars for its song score. Animation had become so widely accepted by the beginning of the 21st century that, in 2001, the Academy of Motion Picture Arts and Sciences introduced a new Academy Award for Best Animated Feature.

The three contenders for first honoree in this award were all CGI feature films: Shrek, by DreamWorks, Monsters, Inc., by Disney and Pixar, and Jimmy Neutron: Boy Genius, by Nickelodeon and Paramount. The award that year went to Shrek. Films that year which were passed up included the acclaimed adult-oriented film Waking Life and the photorealistic CGI film Final Fantasy: The Spirits Within.

Hayao Miyazaki's critically acclaimed Spirited Away won the Oscar in 2002. Disney/Pixar's Finding Nemo received the 2003 award, defeating nominees The Triplets of Belleville and Brother Bear. Since then, Pixar has won the most awards in this category with the current exceptions being Wallace & Gromit: The Curse of the Were-Rabbit in 2005, Happy Feet in 2006, Rango in 2011, Frozen in 2013, Big Hero 6 in 2014, Zootopia in 2016, and Spider-Man: Into the Spider-Verse in 2018.

In 2013, the March 7 issue of The Hollywood Reporter magazine published the ballots of eight different Oscar voters in the Academy.[54] Of those eight, four voters abstained in the Best Animated Feature category due to inadequate knowledge of the subject. They admitted to not having seen all of the nominations, one person stating "that ended when I was 6." Such disregard for animated films is often criticized by American animators, who claim that "Hollywood doesn't care or know the first thing about animated films."[55]

The Annie Awards are presented each February by the Hollywood branch of the International Animated Film Association for achievements in the fields of film and television animation in the United States. Formed in 1972 to celebrate lifetime contributions to the various fields within animation, the awards started to honor animation as a whole, including current offerings.

• Lenburg, Jeff (June 2006). Who's Who in Animated Cartoons: An International Guide to Film and Television's Award-Winning and Legendary Animators. Applause Books. ISBN 1-55783-671-X.
• Solomon, Charles (1989). Enchanted Drawings: The History of Animation. New York: Random House, Inc. ISBN 978-0-394-54684-1.