DreamWorks Animation is retooling it's plans for Puss 'n Boots.

In a story from Variety, the Shrek spinoff was thought to be going straight-to-DVD, but it looks like it actually will be released theatrically in 2010.

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According to CEO Jeffrey Katzenberg the decision to bring out the film out theatrically was due in part "to a crowded direct-to-video market" and the cost of making a film that could possibly turnoff Shrek fans.

"We think ultimately we can get the most from this property by waiting and releasing it theatrically," he told Daily Variety.

In addition to this news, Dreamworks Animation has decided to take a spinoff film featuring the penguins of Madagascar, originally slated for a straight-to-video release, and turn it into a series for Nickelodeon.

Even though DreamWorks Animation "has now emptied out its direct-to-video development pipeline," Katzenberg said the company isn't getting out of that end of the business.