Disney executives watched the success of the Pixar films with mingled joy and alarm. On the one hand, the Pixar films—particularly Finding Nemo and the two Toy Story films—were bringing quite a bit of money into their coffers, both in box office receipts and ancillary merchandise revenue. On the other hand—well, after the late 1990s, most of the Disney produced animated films were losing money, and only Lilo & Stitch was bringing in anything close to the ancillary revenue generated through sales of little Woodys, Buzz Lightyears, Monsters and Nemos.
Pixar arguably was overtaking Disney on what had been their exclusive, lucrative domain. (Arguably, since other studios had also produced financially successful full length animated movies, and the Disney issues had more to do with the quality of their films than with their rivals.) And, far more alarmingly, relationships between the two companies were slowly but surely disintegrating, even as Pixar animators showed Disney executives concept art of talking cars.