PIXAR STORY; STUDIO HAS RIGHT TOOLS FOR SUCCESS.

Byline: David Germain Associated Press 

Far from Hollywood's madding crowd, Pixar Animation embodies the notion of a film fun factory, from its animated telephone system to a display of ``vintage'' playthings plugging its new movie, ``Toy Story 2.''

Visitors to Pixar's headquarters north of Oakland first see a showcase filled with pseudo-collectibles, items based on the very modern ``Toy Story'' characters aged to resemble antiques, right down to the yellowed Scotch tape on the spine of a pulp paperback called ``Woody's Ropin' Rescue.''

Telephone calls are answered by Pixar's boisterous automated phone line, which provides directions to the studio (``just turn left at the refinery'') and advises the technologically impaired that ``If your VCR at home is still blinking 12 o'clock,'' press 0 for a live operator.

The showcase and phone system are signposts that Pixar, the leading pioneer of computer-generated animation, is neither a gathering of computer techno-geeks nor a hierarchy of studio suits. Rather, Pixar is a hybrid, combining cutting-edge technique with storytelling creativity worthy of its cartoon forebearer and movie partner, the Walt Disney Co.

``Pixar is a blend of the Hollywood creative culture and the Silicon Valley technical and business culture,'' said Steve Jobs, the studio's chairman, who also founded and heads Apple Computer. ``We've managed to pick the best of both those cultures.''

``Toy Story 2,'' which opens nationwide Wednesday, shows all signs of the commercial and critical success of Pixar's previous films, ``Toy Story'' and ``A Bug's Life.'' Both topped $350 million at theaters worldwide and took in hundreds of millions more from video and merchandise revenue. Not bad for a company releasing just its third movie in an industry where failures far outnumber hits.

Key players among Pixar's 430 employees are John Lasseter, who directed all three movies, and chief technical officer Edwin Catmull, who headed development of the technology that made the three-dimensional worlds of ``Toy Story'' and ``A Bug's Life'' possible.

Once part of George Lucas' special-effects empire, where Catmull worked for seven years, the company was incorporated as Pixar when Jobs bought it from Lucas for $10 million in 1986. Catmull came along to develop his dream of producing full-length animated movies on computer, a vision he'd had since 1972.

Jobs took the company public in 1995 but still owns about two-thirds of Pixar's shares.

Lasseter, who had been an animator at Disney, also joined up. Their first efforts were short films, including the Academy Award-nominated ``Luxo Jr.'' and ``Tin Toy,'' an Oscar winner in 1988.

Produced in partnership with Disney, ``Toy Story'' debuted in 1995, earning Lasseter an Oscar for special achievement, and ``A Bug's Life'' followed in 1998. Running counter to Disney's pattern of releasing animated sequels direct-to-video, the two studios decided early on to bump up the budget and make ``Toy Story 2'' a theatrical release.

``We couldn't let the sequel be anything less than what the original was,'' Catmull said. For all of Pixar's technical savvy, the studio's executives say their computer-animation expertise is just a tool, like pen and ink, to tell good stories.

``At the end of the day, what's going to drive people to movies is not how technically advanced a film is. It's how good the story is,'' said Katherine Styponias, an entertainment analyst with Prudential Securities. ``You have to create characters people will come to love and see over and over.''

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PHOTO (color) John Lasseter, former Disney animator and director of Pixar's ``Toy Story 2'' holds two characters.

Randi Lynn Beach/Associated Press