DreamWorks Buys Stake in Computer Animation Firm

DreamWorks SKG became the latest Hollywood company to jump into the computer animation business, acquiring a 40% stake in Pacific Data Images of Sunnyvale, Calif.

DreamWorks is making the investment in the closely held company, funding a research and development effort, investing in new hardware and producing a yet-to-be-announced computer-animated film with the company. When all of that is added up, sources said, DreamWorks will spend about $30 million.

DreamWorks is clearly hoping to capitalize on the growing interest in computer animation, sparked largely by the success of Walt Disney Co.’s groundbreaking hit “Toy Story,” made by computer animation firm Pixar Inc.

Ironically, DreamWorks partner Jeffrey Katzenberg is the former chairman of Walt Disney Studios and was involved in the early stages of getting “Toy Story” off the ground before leaving the company in 1994.

Fifteen-year-old Pacific Data Images, which plans to relocate to expanded facilities in Palo Alto next month, is one of the older computer graphics firms. Its film credits include “Batman Forever,” “Angels in the Outfield” and “Natural Born Killers.”

It has also been involved in such advertising work as a computer make-over of the Pillsbury Doughboy and such music videos as Michael Jackson’s “Black or White.”

DreamWorks and Pacific Data have a common link in Glenn Entis, who last fall was hired to head DreamWorks Interactive. He is one of the founding partners of Pacific Data, along with Carl Rosendahl and Richard Chuang.

Katzenberg said he’s been a fan of the company for years and was especially drawn to it after seeing such works as the 1992 computer-animated short “Gas Planet.”

Despite Pacific Data’s varied projects, Katzenberg said DreamWorks’ involvement will be mainly in computer-animated films.