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Apr. 24 (NBD) – "We (Pearl Studio) are back!" Li Ruigang, chairman of CMC Inc., said in an interview with the 21st Century Business Herald in Shanghai on Monday.

Pearl Studio, formerly known as Oriental DreamWorks and now completely owned by CMC, in 2016 released the animated film Kung Fu Panda 3, which reaped over 500 million U.S. dollars worldwide. Since then, it fell silent.

The company, founded in 2012 by China Media Capital (CMC) and DreamWorks Animation, seemed to have a gloomy future following the frequent leadership changes in the past five years and the retreat of the U.S. party last year.

"After all the tests and trials, we eventually found a suitable model," said Li Ruigang. This to some extent explains Pearl Studio's back in the game after three years of silence.

In the past, it was always the foreign party that had the absolute say over creativity, but now, Chinese teams would be in full charge of core procedures such as creativity and art design, Li noted. Moreover, the company now enjoys a higher level of flexiblity in operations, budget management, and decision-making process.

According to Pearl Studio, it will introduce new English-language animated film Abominable in 2019, Over the Moon in 2020, and The Monkey King in 2021. From 2022 and onwards, the company will accelerate the development pace, with a plan to bring in 1-2 original films annually.

"Uncertainties still exist in the market and Pearl Studio faces tremendous challenges," according to Li.

Data showed the annual releases of domestic animation in recent years, stably fixed at above 30 though, presented a downward trend compared with 3-4 years ago.

The box office of Chinese animation slid substantially to 1.5 billion yuan (223.2 million U.S. dollars) in 2018 from 2.35 billion yuan (349.7 million U.S. dollars) in 2016.

"There's a huge gap between domestic animation and overseas one in terms of genre," commented Fu Yalong, deputy GM of data provider Entgroup.

He further pointed out compared with other countries, China is short of professional animation producers, which resulted in an inability of continuous output of high-quality works.

However, opportunities await China's animation market as well.

"The U.S. market began to put spotlight on animation sprung from other countries, bringing chances to the top content producers," remarked Li, taking Coco from Mexico for example.

In his mind, only top animation IPs could draw huge capital inflows and create a large customer base while meeting market anticipation.

To cope with the fierce competition, Pearl Studio will build an industrial system based on which the company aims to constantly produce premium contents and bring hit products to the market.

In the future, the animation maker will also focus on developing peripheral products by drawing experience from Universal Studios and Disney, said Frank Zhu, CEO of Pearl Studio.

Email: lansuying@nbd.com.cn