Can Mickey Find His Mojo?

In the old fairy tale, a fretful fowl named Chicken Little gets bonked by an acorn, mistakes this minor incident for an astral calamity and frightens the neighbors by exclaiming, "The sky is falling!" In the world of traditional animation, when computer-generated (CG) 3-D cartoons came in, the sky did fall. The first piece was Pixar, with such movies as Toy Story and Monsters, Inc. Another chunk was DreamWorks (the Shreks). And, yes, an outfit called Blue Sky fell too, with Ice Age and Robots. Hand-drawn, or 2-D, animation was instantly kaput. Chicken Little was right.

In a decade, CG animation has achieved a commercial and artistic revolution. It has also achieved something else: it annihilated the Disney cartoon feature. Now, with a fresh team at the company--CEO Robert Iger, film-studio boss Richard Cook and animation chief David Stainton--Disney has begun the arduous process of remaking itself. "It's like a battleship changing course," Cook says. "It takes a while, but we're moving in the right direction."

They are indeed, to judge from the exclusive peek they offered TIME of their first four CG theatrical features. Disney surely has a winner in its debut effort, Mark Dindal's Chicken Little, which opens Nov. 4. It's one of the funniest, most charming and most exhilarating movies in years. And it's a genuine Disney cartoon, with a storytelling sense and graphic precision worthy of the old animation masters.

The transition from pencils to pixels hasn't been easy for the studio. Hand-drawn feature animation was an art form it created and then nurtured for six decades, from Snow White and the Seven Dwarfs in 1937 through the '94 smash The Lion King. Who could imagine that the empire would crumble? And why, when Disney had a distribution pact with Pixar, should the parent studio pursue CG animation? The box office answered both questions briskly: of the 10 top-grossing animated films since 1995, when Toy Story became the first computerized cartoon feature, all but one (Disney's Tarzan, at No. 10) are CG.

Like a dazed boxer who has been KO'd, the old-line Disney artists were slow to rise from their canvases. They kept making serioso dramas with soaring Broadwayesque scores, when the CG films were mopping up with brash, no-song comedies that appealed to young males as well as the family audience. New ideas were stifled. "It's kind of an irony," says Oscar-winning animator Eric Armstrong (The ChubbChubbs!), "because Walt was well known for being an innovative guy. A lot of people thought it was funny that Disney didn't want to try the same experimentation."

Gradually, Disney's box-office magic evaporated; Treasure Planet, in 2002, cost about $140 million yet cadged only $38 million at the domestic wickets. Worse, relations with Pixar soured--though the premier CG studio may sign up with Disney again. Last week Disney CFO Thomas Staggs said the film division expected a loss of more than $250 million for the year's fourth fiscal quarter.