DreamWorks Canceled ‘Shrek’ After “Horrifying” Test Footage

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Shrek, resembling an animated actor, is talking to Donkey in a field of sunflowers under a clear blue sky. Shrek has his hands raised as if explaining something, while Donkey listens skeptically, clearly questioning the condition of Shrek’s reasoning.

Credit: DreamWorks Animation

At this point in time, with Shrek having grossed well over $4 billion dollars at the box office, making it one of the most successful animated franchises of all time, it is hard to believe that there is a world where our favorite green ogre doesn’t exist.

Shrek smiling in front of autumnal trees
Credit: Dreamworks

But what if we told you that there was a moment in our Multiverse when humanity was nearly pulled away from learning about Donkey’s waffles, Gingy’s gum drop buttons, Farquaad’s hideous haircut, and Fiona’s ability to kill wildlife with her voice turning the Disney princess trope right on its head?

In 1995, that nearly happened.

In 2001, DreamWorks Animation released Shrek, an irreverent fairy tale that went on to become a cultural phenomenon. Its success seemed inevitable in hindsight, but what many don’t know is that the movie almost didn’t see the light of day.

In 1995, DreamWorks produced a one-minute test footage of Shrek. The results were far from what anyone expected. The characters in the test appeared unsettling, almost grotesque, with a bizarre, off-putting quality that horrified the production manager. The animation was rough, and the characters lacked the charm that would eventually define the Shrek franchise.

Upon seeing this early version, DreamWorks immediately halted production, deeming the project a disaster. The 40-person animation crew working on the film was dismissed, and the future of Shrek seemed uncertain.

At the time, DreamWorks had already poured millions into the project with little to show for it. The studio, facing mounting costs, was at a crossroads. However, instead of shelving the project entirely, DreamWorks decided to transfer the production to a CGI studio in Northern California, a bold move that would ultimately change Shrek’s fate.

The new team reimagined the visual style, opting for more realistic and refined character designs that retained the essence of a fairy tale but felt approachable to audiences.

But even with the new direction, Shrek was far from DreamWorks’ top priority. In fact, it earned the nickname “the Gulag” within the studio, as animators who failed on other projects were often sent to work on Shrek as a form of punishment.

If an artist didn’t succeed on The Prince of Egypt—a film DreamWorks believed would be its crowning achievement—they were reassigned to the Shrek team. The process was even referred to as being “Shreked” by employees.

Shrek in a mud smiling with Fiona coming out of his shack in the background
Credit: Dreamworks

Ironically, the film that Shrek was seen as a “dumping ground” for, The Prince of Egypt, underperformed at the box office, while Shrek went on to do the unthinkable. Upon its release in 2001, Shrek defied all expectations, grossing nearly $500 million worldwide and becoming one of the highest-grossing films of the year.

Audiences were captivated by its unique take on classic fairy tale tropes, irreverent humor, and cutting-edge animation, which marked a significant step forward in CGI.

Beyond its box office success, Shrek became a critical darling, winning the first-ever Academy Award for Best Animated Feature. It also spawned a massively successful franchise, with three sequels, spin-off films like Puss in Boots, television specials, and even a Broadway musical. Mike Myers’ iconic portrayal of the grumpy, yet lovable, green ogre, along with Eddie Murphy’s energetic Donkey and Cameron Diaz’s feisty Princess Fiona, became instantly recognizable characters worldwide.

What began as a project with low expectations, born out of necessity and redirected effort, became one of DreamWorks’ most defining successes. Shrek not only helped establish DreamWorks Animation as a serious competitor to Disney and Pixar but also became a cultural touchstone for an entire generation. Its humor, blending satire and heart, resonated with both children and adults, ensuring its legacy endured long after its release.

If you want to take a look at what the initial animations of Shrek were, you can see below, thanks to Historic Vids on X.

“In 1995, DreamWorks produced a one-minute test footage of Shrek. When the production manager saw it, he was horrified-the characters appeared unsettling and bizarre. Production was halted immediately, and the 40-person crew was dismissed.

The studio had already spent millions with little to show for it. The project was then transferred to a CGI studio in Northern California, which gave Shrek a more realistic appearance.

Before its 2001 release, Shrek was considered by DreamWorks to be a low-priority project, often seen as a place where animators were sent after failing on other films. It was nicknamed “the Gulag.” If an artist didn’t succeed on The Prince of Egypt (a film that later underperformed), they were reassigned to Shrek, a process employees referred to as being “Shreked.”

Shrek 1995 Animation
Credit: Historic Vids, X

Today, Shrek stands as a testament to the power of perseverance and the unpredictability of creative success. A project that was almost abandoned—seen as a punishment for animators—ended up being one of the most beloved animated films of all time. The journey from near-failure to global icon is one that continues to inspire the animation industry, proving that even in the world of movies, underdogs can emerge as champions.

Shrek 5: What We Know

Development has been slow, but Shrek 5 is finally inching its way out of the notorious development limbo.

Despite several changes in direction and storylines over the years, the fifth installment in the beloved franchise is now on the horizon, thanks in part to the renewed interest sparked by the success of Puss in Boots: The Last Wish.

The acclaimed spinoff reignited excitement for more adventures in the whimsical land of Far, Far Away, paving the way for Shrek 5 to potentially be the most thrilling chapter in the series that solidified DreamWorks as a major force in CGI animation.

An animated green ogre, Shrek, dressed in a white shirt and a brown vest, stands next to a wide-eyed, animated donkey in front of a medieval-style building with blue and white details. Both characters appear to be surprised or concerned.
Credit: DreamWorks

In the latest update, just weeks after news broke that the project was already in production, DreamWorks Animation has officially announced the release date for Shrek 5. The much-anticipated return to the land of ogres and talking animals is slated to hit theaters on July 1, 2026, setting it up as a prime summer blockbuster.

DreamWorks made the announcement via their X (formerly Twitter) account, dropping a teaser video that not only confirmed the release date but also revealed the return of the original stars—Mike Myers, Eddie Murphy, and Cameron Diaz.

Unlike many franchises, the future of Shrek was mapped out early on, with Shrek 5 theoretically confirmed as far back as 2004, after the success of Shrek 2. Now, more than two decades later, the long-awaited sequel has secured its release date. While it’s possible the July 1 premiere could shift as production continues, the early summer spot seems ideal for a franchise of Shrek’s stature.

One of the biggest questions surrounding Shrek 5 was whether the original cast would reprise their iconic roles. Fans can now breathe a sigh of relief, as recent updates have confirmed the return of the core trio. Eddie Murphy, who has been a vocal advocate for continuing the franchise in recent years, is officially back as Donkey.

Mike Myers, whose enthusiasm for playing the lovable ogre has never waned, will once again lend his voice to Shrek. The biggest surprise, however, is the return of Cameron Diaz as Princess Fiona. After stepping away from Hollywood and announcing her retirement, Diaz has decided to come out of retirement to rejoin her Shrek co-stars for the new film.

As for other familiar faces, Antonio Banderas has yet to sign on as Puss in Boots, though his return is expected given the success of his recent spinoff. The Shrek series is known for its impressive roster of supporting characters, and fans can likely expect some new faces as well as the return of classic fairy tale characters like Gingerbread Man and Pinocchio.

Shrek the Third King Arthur Artie Pendragon
Credit: DreamWorks

Despite years of updates regarding the script, no concrete plot details have been shared about Shrek 5. With Shrek and Fiona having found their happily ever after at the end of Shrek Forever After, the story will need a significant shake-up to bring the characters out of their contentment.

One possible direction the story could take is focusing on Shrek and Fiona’s children, who would be teenagers by the time Shrek 5 takes place. This would open up a range of possibilities for a new generational narrative, as Shrek navigates both aging and keeping up with the next wave of fairy tale characters.

With its beloved cast, a fresh opportunity for adventure, and the undeniable charm that has kept the franchise alive for years, Shrek 5 is shaping up to be a highly anticipated return to Far, Far Away. Fans will just have to wait until July 2026 to see how the next chapter unfolds.

Did you know DreamWorks nearly shut down Shrek for good?

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