John Whitney Jr. and Gary Demos worked at Digital Productions, which was bought out by Omnibus Computer Graphics in June 1986.
W/D's first project had them work with Symbolics' Graphics Division to produce the short film Stanley and Stella: Breaking the Ice.
Before they could collect the rest of an initial $5 million loan, much of the CG production industry collapsed because of Omnibus's failed growth plan, and investors balked.
In 1996, USAnimation sold its software development business to Canadian competitor Toon Boom Technologies and its animation production services were renamed VirtualMagic USA.
[3] VirtualMagic would continue to operate the company while expanding its production capacity to include CGI animation and significantly increasing employment.
In late-1997, the company completed changing its name to VirtualMagic Animation and moved into a new production space in the San Fernando Valley.