In 1934, Walt Disney gathered several key staff members and announced his plans to make his first feature animated film, Snow White and the Seven Dwarfs. The production was dubbed "Disney's Folly" due to many doubting its success. The film became the first animated feature in English and in Technicolor. Silly Symphonies such as The Goddess of Spring (1934) and The Old Mill (1937) served as experimentation grounds for new techniques for the production.
Walt Disney introduced each of the Seven Dwarfs in a scene from the original 1937 Snow White theatrical trailer.
Snow White and the Seven Dwarfs cost Disney an expensive sum of $1.4 million to complete (including $100,000 on story development alone), and was an unprecedented success when released in February 1938 by RKO Radio Pictures, which had assumed distribution of Disney product from United Artists in 1937. Snow White and the Seven Dwarfs was briefly the highest grossing film of all time before the success of Metro-Goldwyn-Mayer (MGM) and Selznick's Gone with the Wind two years later, grossing over $8 million on its initial release, the equivalent of $134,033,100 in 1999 dollars.
The studio launched into the production of new animated features, the first of which was Pinocchio, released in February 1940. Pinocchio was not initially a box office success. Of the film's $2.289 million cost – twice of Snow White – Disney only recouped $1 million by late 1940, with studio reports of the film's final original box office take varying between $1.4 million and $1.9 million. However, Pinocchio was a critical success, winning the Academy Award for Best Original Song and Best Original Score, making it the first film of the studio to win not only either Oscar, but both at the same time.
Fantasia, was released in November 1940 by Disney itself in a series of limited-seating roadshow engagements. The film cost $2 million to produce, and although the film earned $1.4 million in its roadshow engagements, the high cost ($85,000 per theater) of installing Fantasound placed Fantasia at an even greater loss than Pinocchio. Despite its financial failure, Fantasia was the subject of two Academy Honorary Awards on February 26, 1942, one for the development of the innovative Fantasound system used to create the film's stereoscopic soundtrack, and the other for Leopold Stokowski and his contributions to the film.
Much of the character animation on these productions and all subsequent features until the late 1970s was supervised by a brain-trust of animators Walt Disney dubbed the "Nine Old Men," many of whom also served as directors and later producers on the Disney features. Other head animators at Disney during this period included Norm Ferguson, Bill Tytla, and Fred Moore. The development of the feature animation department created a caste system at the Disney studio: lesser animators (and feature animators in-between assignments) were assigned to work on the short subjects, while animators higher in status such as the Nine Old Men worked on the features. Concern over Walt Disney accepting credit for the artists' work as well as debates over compensation led to many of the newer and lower-ranked animators seeking to unionize the Disney studio.
Dumbo, in production during the midst of the animators' strike, premiered in October 1941, and proved to be a financial success. The film only cost $950,000 to produce, half the cost of Snow White and the Seven Dwarfs, less than a third of the cost of Pinocchio, and two-fifths of the cost of Fantasia. Dumbo eventually grossed $1.6 million during its original release. In August 1942, Bambi was released, and as with Pinocchio and Fantasia, did not perform well at the box office. Out of its $1.7 million budget, it only grossed $1.64 million. While Fantasia, Pinocchio and Bambi were initially disappointments, their success would rewrite themselves after some very successful re-releases.
The first five Disney films are today, some of the most acclaimed animated films of all time, and each are still huge financial successes. It is considered the best era of Disney films, as these groundbreaking films established the genre of the animated film.