"This is a dimensional strike," Takuya Nakayama commented. "Hollywood's cultural hegemony combined with next-gen interactive technology. Keep the buzz alive, coordinate with Disney's Christmas promotional schedule, and get GG into every family's TV set."
After hanging up the phone, Takuya Nakayama pushed the newspaper clippings aside.
There was a knock on the office door.
Yuji Naka walked in carrying a stack of technical documents.
"Managing Director." Yuji Naka placed the documents on the desk. "Feedback from game media in North America reports that the physics engine's performance in complex scenes is very stable. Pixar is very satisfied with our underlying code optimization."
"Director Lasseter has been heaping praise on you all to the media." Takuya Nakayama pointed to the pile of newspapers. "The 'Instant Classic' review in The Hollywood Reporter specifically mentioned the immersion brought by the game. It notes that this is a milestone in the film industry's extension into interactive entertainment."
Yuji Naka scratched his head. "It's mainly because Pixar's art assets are just so excellent. We merely ported them into the console. However, this collaboration also exposed some shortcomings in our engine. While it has advantages in handling highly reflective materials, when it comes to fur or fabric, Jupiter's performance struggles a bit."
"Technological iteration takes time," Takuya Nakayama said, opening a document. "Pixar also spent over a decade to reach where they are today. The rendering techniques and pipeline processes you've learned from this collaboration are Sega's most valuable assets."
Yuji Naka nodded in agreement and turned to leave the office.
Back in the United States.
The craze surrounding Toy Story not only swept through box office receipts and game console sales but also sparked widespread discussion at a cultural level.
On a television talk show, the host held a Buzz Lightyear doll and teased politicians.
Fast-food restaurant children's meals included miniature figures of the movie's characters, which were snapped up within days.
Traditional animation studios in Hollywood felt unprecedented pressure.
Inside Disney, executives were both pleasantly surprised and wary of these results.
Burbank, Disney Headquarters Building.
Michael Eisner sat behind his expansive desk, listening to the distribution executive's report.
"The opening week box office broke records, and the drop-off in the second week was minimal. Word-of-mouth has fully taken hold." The distribution executive handed over the latest data report. "All the mainstream media are singing its praises. We've printed that 'magically witty' comment from Entertainment Weekly on the new version of our promotional posters."
Eisner flipped through the report, his index finger tapping lightly on the desk.
"Pixar's fire is burning too bright," Eisner remarked. "Jobs is a shrewd businessman. He used our channels to establish the Pixar brand. Now, all of America knows it was Pixar that created this 'instant classic,' not Disney."
"But the distribution rights are in our hands. And the vast majority of the merchandising profits also belong to us," the executive reminded him.
"What about the revenue share from the game with Sega?" Eisner asked.
"In the agreement we signed initially, Sega paid a fixed licensing fee, plus fifteen percent of sales as a royalty," the executive said, consulting a memo. "Based on the current sales growth rate, this royalty is going to be an extremely substantial figure. We underestimated the explosive potential of the next-generation console market."
Eisner closed the report. "For the next round of negotiations, the terms must be redrafted. We can't let Jobs and Sega have it all their way."
However, the bad news awaiting Eisner and Disney was not over.
Early winter on Wall Street came with the biting sea breeze characteristic of the East Coast.
In New York at the end of November 1995, the financial district was no longer talking about traditional blue-chip industrial stocks, but about a new ticker symbol soon to land on the Nasdaq: PIXR.
In fact, at the end of 1994, after new CFO Lawrence Levy took office, he had elevated the IPO to the company's core strategy and began preparing for the listing.
At that time, Pixar was still relying on selling RenderMan rendering software and taking on commercial advertising work to keep running.
The hardware department had long been eliminated, and the animated short film department was a pure money-burning machine.
Jobs's personal checkbook was the company's only lifeline.
Lawrence Levy believed that, apart from going public, there was no other way to cover the massive capital expenditure required for feature-length animated films.
Jobs agreed to this plan.
Wall Street did not believe in computer animation without a box-office track record; they needed an unprecedented victory to prove Pixar's commercial value to institutional investors.
Toy Story was that key.
By the roadshow phase across the U.S. from October to November, institutional investors were initially divided on how to position Pixar.
Should a computer animation company be valued like a Hollywood studio, or like a Silicon Valley tech company?
At an investor presentation in New York, Lawrence Levy changed his usual pitch strategy.
Instead of playing a tedious financial forecast PPT, he had staff wheel out a Sega Jupiter console connected to a large CRT TV.
On the screen, a fully 3D-rendered Buzz Lightyear moved fluidly through Andy's room.
"This is not a movie trailer; this is live gameplay footage of the video game of the same name that Sega made for us." Lawrence Levy presented the sales figures to the fund managers in the audience. "Before the movie's release, pre-orders for this game and the limited-edition console have already exceeded ten million dollars. Pixar possesses more than just a share of the box office; we have the ability to create top-tier cross-media IPs."
Wall Street understood this logic.
If a movie could drive a $399 piece of hardware to sell out, the monetization potential of this IP would far exceed traditional box office and video rental revenues.
November 28, the eve of the IPO.
In a suite at a luxury hotel in San Francisco.
Representatives from the underwriting investment banks were holding a final pricing meeting with Jobs.
The heads of the two investment banks, Robertson Stephens and Hambrecht & Quist, sat on the sofa, with thick stacks of subscription intent forms scattered before them.
"Market demand has far exceeded expectations," the lead underwriter said, loosening his tie. "The originally planned issue price of twelve to fourteen dollars is no longer applicable. The institutional subscription orders are practically jamming our fax machines."
Lawrence Levy pulled out the latest Thanksgiving weekend sales report: "The movie's opening weekend box office broke records, and sales of the tie-in game from Sega have topped 1.1 million units. All 100,000 limited-edition consoles are sold out. Market sentiment is at an all-time high."
Jobs sat in an armchair, twirling a pencil in his hand, listening to the investment bankers' revaluation.
"Eighteen dollars," an investment bank executive stated, "That's already a significant premium."
"Twenty-two dollars." Jobs stopped playing with the pencil and tossed it onto the table. "Any lower than that, and we'll postpone the IPO."
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