April 25, 1990: Steve Jobs shuts down Pixar’s hardware division (yes, it used to have one!), ending production of the pricey Pixar Image Computer immediately.
Jobs sells the company’s hardware unit to Fremont, California-based imaging company Vicom Systems for a paltry $2 million.
Steve Jobs at Pixar
Pixar was Jobs’ “rebound” company after his acrimonious departure from Apple in 1985. In early 1986, he bought a majority interest in the animation studio from Star Wars creator George Lucas for just $5 million (and an extra $5 million in guaranteed funding).
The long-term dream of Pixar’s founders was to create feature-length computer-animated movies, which is exactly what happened. However, while they waited for Moore’s law to make this kind of computing power possible, Jobs thought the company could sell computers to pay its way.
Pixar Image Computer: Too expensive
Lucas led the company during the development of the Pixar Image Computer. The filmmaker found existing computers too weak to handle the graphics needed to produce Pixar’s work (or to meet the demands of Hollywood studios that hired the company).
The Pixar Image Computer launched three months after Jobs acquired a controlling interest in the company. It was an impressive piece of kit, but carried a $135,000 price tag (the equivalent of more than $380,000 today). It also needed a $35,000 Sun Microsystems or Silicon Graphics workstation to function.
A second-generation model called the Pixar Image Computer II (aka the P-II) followed in 1987, with a vastly reduced price tag of “just” $35,000.
However, the computers sold poorly — and to a relatively small number of buyers. By April 1990, fewer than 300 Pixar Image Computers had sold. The main buyers included The Walt Disney Company, universities, intelligence agencies and medical research labs.
When Pixar’s five-person Animation Group won an Oscar for its short film Tin Toy in 1989, Jobs’ interests switched to that team, which he previously planned to kill off due to its inability to turn a profit. He canned the hardware division instead.
Pixar Image Computer: When ditching hardware turns out well
This happened amid a bad few years for Jobs. Of the two companies he owned — Pixar and NeXT — neither sold hardware in the quantities necessary to reach sustainability. Three years after the Pixar Image Computer was discontinued, NeXT also quit making hardware — and laid off 330 of its 500 employees.
Fortunately, both events turned out to be for the best. A reconfigured version of NeXT’s operating system, called OpenStep, led to NeXT being sold to Apple in 1996. (This ultimately led to Jobs becoming Apple’s CEO.)
As for Pixar, the renewed focus on animation led to Toy Story. The success of that film triggered the IPO that made Jobs a billionaire.
Did you ever use a Pixar Image Computer? Are you a Steve Jobs completist who happens to own one? We’d love to hear about it in the comments below.