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Answer by Craig Good, an original Pixar employee who worked there for 31 years:
I’d say there are a few key things at work here.
Pixar does not make children’s films. It has yet to make a single one. When you make a film aimed at an audience or a demographic, you are making the insane claim that you have the ability to read minds. Most bad big-budget movies are made for an audience. Pixar, on the other hand, makes movies its employees want to see. At some point in production it has to make sure that the film is still suitable for a young audience (note that it didn’t shy from a PG in the case of The Incredibles), but it does not make the movies for children.
Pixar is a creative-driven studio. It doesn’t seek or accept outside story ideas. If the director doesn’t feel passionate enough about a story to want to spend five or six years in hell bringing it to the screen, it doesn’t get done. The development department is there to support the directors, not to buy and assign properties to be made.
Pixar’s movies all suck, and it knows it. At some point in production, every single Pixar film sucks. The trick is not stopping there. Very few studios are willing to hit the brakes on a production and idle several hundred extremely expensive artists while story problems get worked out. Pixar has done this multiple times. It eats into its profitability, but is good for its reputation.
Pixar only hires the best. I remember lunch with a Toy Story–era animator who said that if he were showing up then he’d never get hired. There are so many people who want to work there now that it’s insanely competitive to get in. Want to work in production at Pixar? Simple: Just be better than 99.9 percent of everybody else in the industry. And hope there’s an opening.
Pixar values its employees. It understands that the only meaningful assets it has are the people who make the movies happen and who enable those who do. It can be a very demanding environment, but they do what they can to make it a rewarding one. (Now that the studio is so big this happens with varying degrees of success, but they do try.)
Story really is king. It’s not just a slogan. Story drives everything creative at the studio: technology, art, and even the layout of the buildings. This attitude is foundational. John Lasseter mentioned when we were making Toy Story that the “new” look of the film would keep an audience engaged for about 10 minutes. After that, if the story didn’t carry the film, it would crash and burn.
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