Back in 2012, DreamWorks Animation helped spearhead an ambitious venture in China. Partnering with Chinese Media Capital, they launched Oriental DreamWorks. They began helping with pipeline work on several DreamWorks films, and had a heavy hand in Kung Fu Panda 3. Eventually though, the ambition had been for the studio to make its own movies, blending the technical expertise of DreamWorks artists with Chinese culture.
That strategy began to shift in 2016 though, when Universal purchased the studio. Sure enough, earlier this month Universal's share in Oriental DreamWorks was bought out by CMC Capital Partners. It has since been rebranded as Pearl Studio, with the hope to build it "into one of the world’s leading creators of high-quality animated content for every screen and platform." Its first expected release will be Everest, which has been in the pipeline for some time now and is due out in 2019.
This marks the end of an era in a way. When Katzenberg's DreamWorks first agreed to this deal, it was one of the first major collaborations between Hollywood and China. The Chinese government had been notoriously selective about which films were allowed into the country, but by utilizing Chinese resources studios found that they could access a large market, with a burgeoning population and increasing economic prosperity. It had been seen as a goldmine.
In practice, however, the goldmine was a golden goose - and the eggs were quickly extracted. Studios wanted to appeal to American and Chinese audiences as easily possible, but it became difficult to tell stories that everyone could relate to when the authoritarian Communist administration also needed to be pleased. Movie quality suffered overall, and when the government began cracking down on ticket fraud, the Chinese box office stumbled in 2016. As other studios lost interest in Chinese collaboration, it did make sense for Universal to rethink their commitment to Oriental DreamWorks. They already have powerhouse Illumination, and with DreamWorks also under their belt, they didn't need a third animation studio.
This could also be part of the beginning of a new era though... because despite that dip in 2016, the Chinese box office is again growing strong. Between 2016 and 2017, the country's gross sales jumped from $6.59 billion to $8.6 billion. By comparison, the 2017 box office in the United States was just under $10.7 billion, and the global box office was $39.9 billion. So China still wants to see movies, and they are still watching movies. A fundamental shift though, is that more movies are coming from within their own borders.
Last year, Wolf Warrior 2 became a huge success, grossing over $870 million worldwide. That was more than Guardians of the Galaxy Vol. 2, Pirates of the Carribean, or Wonder Woman. Entirely Chinese produced, it made history as the first non-Hollywood movie to become one of the 100 highest grossing movies of all time. The Middle Kingdom has definitely broken into the blockbuster business, and I'm certain we can see more in the future.
The animation front doesn't have quite that kind of success story yet; last year's Rock Dog fell flat in its attempt. However, Pearl Studio has a fair shot at winning over audiences. Universal will carry Everest overseas, so it does have a powerful distributor behind it. Not to mention the buzz around Over the Moon, a production between Pearl and Netflix, which boasts Glen Keane at the helm. It will be exciting to see how Pearl ends up unfurling in the coming years, with these very promising projects coming our way.