Finding Nemo and Shrek 2 made Hollywood take notice of CG animation possibilities. But a glut of family-oriented CG films eroded profits and created studio headaches.

If there was anything like a safe bet in Hollywood, computer animated movies were it. Grab a bunch of computers and associated animators, hire some C and B-list actors to voice the characters and -voila!- money in the bank.

However, success breeds imitation. And when other studios noticed the box office rewards that CG pioneers Pixar (Finding Nemo: $339 million) and Dreamworks (Shrek 2: 436 million) were generating, they immediately wanted a piece of the action. And, in 2006, the CG animation glut has gone critical.

Look at the number of animated movies released so far this year: Fox's Ice Age 2: The Meltdown, Weinstein's Doogal, Disney's The Wild, Dreamworks' Over the Hedge, Disney/Pixar's Cars, Warner Independent's A Scanner Darkly, Sony's Monster House, Warner Bros.' The Ant Bully and Paramount's Barnyard.

Nearly all of these movies were aimed at the family market, and all but three featured adorable, wise-cracking animals. With so many movies on offer to a single demographic (and so many similar concepts), some were bound to fall between the cracks.

Also, these films came out quite close together. The Wild opened 2 weeks after Ice Age 2, Cars hit theatres 3 weeks after Over the Hedge, and Monster House, The Ant Bully and Barnyard opened over a 3-week period.

This fall won't be much better. Everybody's Hero and Open Season are opening 2 weeks apart in September, and Flushed Away and Happy Feet will do the same in November.

The animated-movie glut has even hurt the big boys' cash flow. Over the Hedge and Cars were qualified successes, making $150 and $235 million respectively at the box office. Nice numbers, but well below their studios' predictions. This year, the only unqualified hit has been Ice Age 2, with a $195 million domestic take, and $461 million internationally.

Of course quality control plays a major part in a movie's success: if it sucks, consumers generally stay home. Doogal, The Wild and The Ant Bully bombed at the box office, and deservedly so.

And let's face it: Cars and Over the Hedge weren't as strong as Pixar and Dreamworks' previous offerings. Over the Hedge was yet another wisecracking-animals fick, and Cars was Doc Hollywood on wheels. Also, the latter film's ode-to-Route-66 theme hasn't played well overseas.

Some nervous nellies, looking at Cars' lacklustre performance, questioned Disney's $7.4 billion payout for Pixar back in May. However, they weren't looking at Cars' merchandise sales, which have been through the roof. Also, add up all the box office which Pixar movies have made for Disney in the past 11 years, and $7.4 billion starts to look like a good deal.

There's a lot of studios competing for CG animation dollars right now, and natural selection will do its job. The Shrek franchise has kept Dreamworks in the game, and Ice Age is doing the same for Fox. But woe to those studios if their cash cows keel over.

Disney/Pixar is the biggest CG player by simply making the most elaborate animation. It also has a stunning brain trust of directors: names like John Lasseter (Toy Story), Andrew Stanton (Finding Nemo) and Brad Bird (The Incredibles). As long as Disney/Pixar doesn't get complacent, or try to fix what ain't broke, that situation won't change.

This article got its inspiration (and some outright cribs) from Variety and FT.com.

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