The Walt Disney Co. has announced the creation of a new computer animation unit, which will be based in Glendale California and will produce feature film sequels to the Pixar movies Disney has distributed, a highly successful group of films that includes Toy Story movies, Monsters Inc., Finding Nemo and The Incredibles.  Disney's distribution deal with Pixar gives the mouse house the right to make sequels with or without Pixar's cooperation.  The announcement of the new Disney unit dedicated to making sequels to the Pixar pics would appear to indicate that Disney has given up all hope of re-negotiating its distribution agreement with Pixar, which expires with the distribution of Cars, now slated for the summer of 2006.

Disney announced that the first project for its new animation unit will be Toy Story 3, which, unlike many of the direct-to-video sequels the studio makes for its own films such as the Lion King, will be theatrically released in 2008.