A question we often get from readers is why Pixar films cost more to produce than big-budget features from other studios.
Using some of this year’s theatrical releases as examples, the reported production budget for Spider-Man: Across the Spider-Verse was between $100-150 million, The Super Mario Bros. Movie was around $100M, and Ruby Gillman, Teenage Kraken and Teenage Mutant Ninja Turtles: Mutant Mayhem came in at $70M apiece. Meanwhile, Disney-Pixar’s Elemental has been said to cost a whopping $200M.
What is causing the big differential in budgets? A common misconception is that Pixar’s films cost more because of the visual and technical complexity of the films. But according to Pixar president Jim Morris (pictured at top), that’s not necessarily the main reason. In a new interview with Variety, Morris explained the different factors that increase the cost of Pixar’s productions.
Pixar’s films are made in the United States
“One of the ways you make these films for less money, and almost all of our competitors do this, is to do work offshore,” Morris told Variety. “It’s only us and Disney Animation that makes animation films in the U.S. anymore with all of the artists under one roof. We feel like having a colony of artists approach has differentiated our films.” Morris is not entirely correct in that statement because Dreamworks also continues to produce many of its films, including Ruby Kraken, in Glendale, but it is true that the production of films like Spider-Man, Super Mario, and TMNT took place in either Canada or France. Studios benefit by producing in other countries not only from cheap labor (like a starting wage of $22.50/hr to animate on Spider-verse), but also foreign tax credits, rebates, and incentives that use other countries’ taxpayer money to fund American productions.
Also, something interesting to take into account: Dreamworks is a unionized shop, while Emeryville-based Pixar isn’t part of The Animation Guild, yet Pixar’s non-unionized production still managed to cost nearly three times as much as a fully-unionized movie like Ruby Gillman. So, while labor is more expensive in California, unionization is not the culprit of higher production costs.
Other studios exclude executive salaries and other costs, while Pixar doesn’t
Morris claimed that another reason Pixar films are reported as more expensive than other studios is because Pixar’s accounting includes certain line items in its budget that other studios exclude. He explained:
The other thing I’ll say about our film budgets is that our whole company exists only to make these films. So when we say a budget, that is everything it takes to run the whole company. Sometimes, the budgets [for other films] that get reported are physical production costs and don’t include the salaries of executives and things like that. Our budgets include all of that, so there’s some accounting context that gets lost. But that doesn’t mean they’re not expensive.
Though Pixar doesn’t push graphic experimentation in the way that Sony Pictures Animation and other studios have tried to do in the last few years, it doesn’t mean that it’s films are any less visually or technically complex. Elemental, says Morris, was “particularly expensive because all the characters have visual effects.”
In the case of Elemental, the fire and water characters included volumetric simulations, which required a huge deal of processing power. The studio had to ramp up its processing power to a record 151,000 cores (i.e. processing units of the CPU) for the the production of the film, and building supercomputer infrastructure like that isn’t cheap.
Do Pixar films earn enough money to justify their cost?
It depends on the film. Last year’s Lightyear was one of Hollywood’s biggest financial flops, and per independent analysis by Deadline, lost Disney $106M. On the other hand, Elemental started out slowly but has had a highly unconventional box office run and turned profitable. According to Morris, Elemental has turned profitable at the box office alone, not even taking into account all of its other revenue streams: “[A]t the box office we’re looking at now, it should do better than break even theatrically. And then we have revenue from streaming, theme parks and consumer products. This will certainly be a profitable film for the Disney company.”
Will Pixar films ever become cheaper?
“That’s a constant question,” said Morris, who indicated that he is committed to keeping production in California. He also said that prior to Elemental, which cost more because of its technical complexity, “we had been getting the film costs down.” Cutting costs at Pixar is likely imperative for Morris, since Disney CEO Bob Iger said during an earning calls earlier this afternoon that Disney is focused on “reducing … the cost per title” of all its upcoming films.