A new chapter has unfolded in the production story behind the immensely successful Toy Story.

‘With the success of Toy Story, as you can imagine, a lot of people were coming to Pixar,’ says Katherine Singson, director of public relations and marketing at Pixar Animation Studios. ‘But Pixar really values its relationship with Disney, and it seemed like the right one to continue to pursue.’ To prove it, the two studios signed a 10-year, five-picture deal in late February, which includes Disney’s purchase of one million shares of Pixar stock.

According to Walt Disney Feature Animation’s executive vice president of development, Thomas Schumacher, an animated feature, tentatively titled Bugs, and Toy Story II, a direct-to-video release, are the next projects in development.

Under the new arrangement, the two studios will be equal partners on the Bugs project, which Singson describes as a good-versus-evil tale. ‘More projects are coming, but we’re not announcing them just yet,’ says Schumacher.

Toy Story, the first completely computer-animated feature film ever created, grossed over US$350 million worldwide, and Pixar’s John Lasseter landed an Academy Award for special achievement on the feature film, which he developed with Disney’s Schumacher.

In addition to movies, the two studios will team up on home videos, merchandising, interactive media production and made-for-video sales, according to announcements made by Michael Eisner and Steven Jobs, chairmen and CEOs of Disney and Pixar, respectively.

Pixar, headquartered in Point Richmond, California, also creates interactive CD-ROM titles.