Blue Sky Studios, the Disney-owned animation studio behind the Ice Age movies and many other animated favorites, will soon be shutting down. Formerly owned by 20th Century Studios, Blue Sky was famously acquired by Disney in 2019 along with all of Fox's assets. Now, it's been announced that the studio's run will officially come to an end with its last day of operations coming in April, largely due to financial setbacks caused by the pandemic.

"Given the current economic realities, after much consideration and evaluation, we have made the difficult decision to close filmmaking operations at Blue Sky Studios," a studio representative told Deadline.

Around 450 employees at Blue Sky Studios will be affected by the shuttering of the company. Disney will reportedly work with the employees to explore open positions at other Disney-owned studios. The Blue Sky library and IP will also remain under Disney's control, as there are no plans for any other major studios to acquire Blue Sky's employees and operations. Co-Presidents Rob Baird and Andrew Millstein are both expected to exit in the wake of the news.

With Blue Sky Studios folding, production on their next big movie, Nimona, has been shelved indefinitely. The animated movie would have followed a young shape-shifter named Nimona who teams up with the mad scientist Lord Ballister Blackheart to expose the ruler of the kingdom. Featuring Amanda Rabinowitz and directed by Patrick Osborne, the movie was scheduled for ten more months of production with plans to premiere on Jan. 14, 2022.

Blue Sky's last big picture was Spies in Disguise, which was released in 2019. Directed by Troy Quane and Nick Bruno, the movie featured the voice talents of popular actors like Will Smith, Tom Holland, Rashida Jones, Reba McEntire, Ben Mendelsohn, and Karen Gillan. The movie performed rather well with critics, though it fell well short of expectations at the box office, putting the kibosh on plans at the studio for the movie to spawn a new franchise.

One of the studio's earliest works, the short film Bunny, won the Oscar for Best Animated Short Film. At the start, Blue Sky was also provided special effects for movies like Joe's Apartment, Alien Resurrection, MouseHunt, Fight Club, and Star Trek: Insurrection. In 2002, the studio broke out big time with the release of their first feature, Ice Age, which would spawn several high-grossing sequels to follow in the years to come. The latest installment, Ice Age: Collison Course, grossed $408 million at the box office in 2016.

Blue Sky Studios is also known as the studio behind other big-budget animated features like Robots, Dr. Seuss' Horton Hears a Who!, Rio 1 & 2, Epic, The Peanuts Movie, and Ferdinand. In 2018, Ferdinand gave the studio its final Oscar nomination when it was nominated for Best Animated Feature at the Academy Awards.

In December, it was announced that Disney was making an Ice Age spinoff movie following the weasel character, Buck. Called Ice Age: Adventures of Buck Wild, the movie was set for an early 2022 release with Simon Pegg starring as the voice of Buck. It's not yet clear if the closure of Blue Sky Studios will also affect the Ice Age spinoff as it has Nimona. This news comes to us from Deadline.