Long ago (that is, in about 1975), in a galaxy far, far away (California), a promising but still fairly inexperienced young film-maker called George Lucas was trying to launch a $10m science-fiction movie, working title: "The Star Wars". There were many obstacles in his way. For one thing - as a friend of George's, the writer-director Phil Kaufman, had been told after spending the better part of a year trying to adapt Star Trek to the big screen for Paramount - the industry wisdom was that science-fiction yarns simply did not shift tickets.
Creaky sci-fi B-movies such as The Blob, The Thing and The Creature from the Black Lagoon had long since gone the way of the dinosaurs and most of the drive-ins, while Hollywood's more mainstream ventures into deep space or the future (such as Lucas's own, rather arty debut work, THX 1138) tended to be glum, dystopian efforts which attracted only a moderate following: The Terminal Man, Damnation Alley, Silent Running, Logan's Run, A Boy and his Dog... Even a critically lauded "event" movie such as 2001: A Space Odyssey took the better part of a decade to earn back its relatively modest production costs.
Lucas's financial problem was compounded by a technical one. In the post-Easy Rider era, Hollywood had quickly learnt to make films that were as contemporary and realist as they were delightfully profitable - shot fast, cheaply and mainly on location. Very soon, a generation of special effects technicians found themselves unemployed. Warner Bros, which had once had more than a hundred special-effects artists on the payroll, shed its entire effects department. One measure of this dramatic purging of a specialist art is that in 1973 and 1974, the Academy did not even bother to award Oscars for special effects. The few surviving grand Magi of the art - such as Douglas Trumbull and Jim Danforth - were booked up years in advance, or working on their own projects; besides, a lot of people thought that the effects technology Lucas would need for his intergalactic dog-fights simply did not exist.
Concluding that, if the mountain would not come to Mohammed, Mohammed had better start building his own mountain, Lucas set about re-inventing the nature of movie special effects from scratch. He recruited John Dykstra, a giant hippy with waist-length hair who had been one of Trumbull's apprentices, and encouraged him in developing the "Dykstraflex" system of controlled-motion photography: crude by today's standards, but a great leap forward in the technology of animating models. Lucas then took out a lease on a 15,000 square foot building on Valjean Avenue, near San Francisco's Van Nuys airport, as a Spartan working space for Dykstra and his eight initial helpers. (That force grew to 75 within a year, many of the recruits being chronic sci-fi nuts who had spent countless hours messing around with stop-motion photography in their garages.) Finally, he gave the outfit a production budget of $3m - for an estimated 400 effects - and a name: Industrial Light and Magic (ILM).
The next year or so was blighted with delays, arguments and studio pressures, but Star Wars (the definite article having dropped away en route) eventually had its premiere in San Francisco on 1 May 1977. By its final battle sequence, the audience was on its feet and whooping with glee. Star Wars had triumphed, and, for good and ill, it permanently changed the ecology of world cinema. Fantasy was back with a vengeance.
Slow dissolve to San Francisco, 2006. George Lucas is now so rich he could buy a medium-sized planet as a holiday home, and Industrial Light and Magic is... well, huge. Pretty much every fantastical blockbuster of the last thirty years has been made technically possible by ILM: all of the Star Wars films, the Indiana Jones films, the Harry Potters, the Terminators, E.T., The Abyss, Planet of the Apes, War of the Worlds, as well as war movies such as Pearl Harbor, Saving Private Ryan and Schindler's List, and spectacles such as Out of Africa and Gangs of New York, and thrillers such as Mission: Impossible. Each and every one of them has been moulded and polished by the ILM alchemists. Today, ILM is to special effects what Hertz is to car hire.
A few months ago, ILM finally shut the doors on its grungy old offices and moved closer to the heart of San Francisco - to the Presidio, to be precise, an agreeable open space mingling public parkland and private enterprise, nestled close to the Bay with a fine view of the Golden Gate Bridge. ILM occupies a floor in each of the two linked buildings which make up the Lucasfilm HQ - a neat but undramatic four-storey structure which stands on the site of an abandoned hospital. There's nothing to hint to passers-by of the eye-popping image-making that is going on inside, save for the ornamental fountain next to the entrance hall. It is surmounted by a statue of Yoda.
It's only when you pass into the entrance hall itself that the clues start to come thick and fast. There's a life-sized Darth Vader, for one thing, and a similarly large statue of some kind of space-soldier - not your classic Imperial Stormtrooper as seen in the first three Star Wars movies, but some variant form known only to geeks. There is a more conventional sculpture, of the pioneering film animator Willis O'Brien, adjusting a small model of King Kong atop the Empire State Building. And everywhere there are vintage film posters, mainly Italian, mainly advertising corny westerns or cornier SF movies from the 1950s (Creature from the Black Lagoon is one of them).
Once you're nodded through reception, you can wander through any number of dimly lit corridors or brightly sunlit passageways, nondescript save for the posters and other memorabilia. Here are R2-D2 and C-3PO, standing informal guard by the lifts; here is an old optical printer, one of the main ILM tools in the pre-digital age; here a man-sized model house from Lemony Snicket.
After some casual rubber-necking, it is time for a show. The main screening room in the Lucasfilm complex is pretty big - about the size of a medium auditorium in the West End - with an eerily dead acoustic. The curtain-raiser is a recap of ILM's accomplishments since the first Star Wars, and then it's time for a first lesson in CGI, which, as any fule kno, stands for Computer Generated Imagery. Aha! says the ILM host: you know what the letters stand for, but do you really know what's involved? Assuming the answer to be in the negative, he starts a display film, which illustrates some of the key techniques, using Pirates of the Caribbean: Dead Man's Chest as the text for the sermon.
The wonders we see on screen will often, the display film says, be constructed around actual props and actors: cue Orlando Bloom running down a beach towards a scruffy bit of scaffolding; the screen wipes diagonally to the finished, CGI-buffed version, and instead of the scaffolding, a giant galley is ahead of him. Next, cue a long shot of actors, wearing grey pyjamas and clambering up a flat, blue surface mounted on a pivot; another wipe, and they are panicking sailors, scrambling to stay above the lashing waves as their ship cracks in half and sinks. This is a lot of fun.
A more radical version of the same technique is to start the adaptation process at the digital level, with the manipulation of just a few basic geometric shapes to indicate the basic forms and lines of movement. Then the animators move in, and turn those shapes into recognisable things - giant tentacles, say. This intermediate stage is very much like a conventional cartoon. Finally, the whole shebang is handed over to the digital artists, whose job is to make it look thrillingly real. Among the recent breakthroughs for the digital artists is something known as Sub-Surface Scattering. Until just a couple of years ago, CGI faces used to look a little bit too smooth and plastic-y, because the artists treated the image as though light simply hit the features and bounced off. But real skin is semi-translucent - some light goes beneath the surface and is variously refracted. It took great ingenuity to dream up the software that could mimic this effect.
New software also permits the CGI boffins to lend things a mobile life of their own. The outstanding example of this in Pirates is the face of Davy Jones (the great Bill Nighy) - a seething mass of small tentacles in the approximate shape of a beard. This confection is made up of more than 40 individual strands, each programmed to behave both dependently and inter-dependently: they squirm at their own volition, so to speak, until they collide with another tentacle - at which point they bounce away, with a faint but appropriately nasty, liquid stickiness in the bounce.
When it comes to fooling around with actors, the basic gizmo is a motion-capture suit. This is perhaps the simplest tool in the trade - a kind of grey pyjama suit marked with white dots; further white dots are then painted on to the face. Once filmed, the dots provide markers for the animation and digital teams. So when you see Nighy as Davy - and this realisation takes a few seconds to wrap your brain around - you are not looking at a great make-up job which has then been tarted up by computers. What you see are simply pixels and nothing but pixels. Yes, even those chillingly expressive eyes. And yet, they will tell you, Nighy's acting is preserved to the last detail. Take, for instance, the moment when Nighy ad-libbed a little pop of his lips. The director, Gore Verbinski, loved it, and kept it, so what you see on screen is a little kind of bubble effect, a tiny ripple under his shiny, slimy skin. Deliciously nasty.
After the screening, a tour. To the huge computer room, first of all. But the human software is more engaging than the hardware, especially in the case of Aaron McBride, a so-called Concept Artist who looks about 12 years old, has floppy brown hair, swigs from a fizzy drink and shows off his work with the kind of aw-shucks modesty of a clever boy with a pet science project. His love for this kind of work is almost palpable, and he enjoys revealing the little tricks he has hatched. When he was working on the first Pirates film, he had to duplicate the effect of rotting flesh hanging from bones. The answer? Scanned into computers, a snack product called Turkey Jerky looked just right on screen. For the second Pirates, which features a ghostly crew gradually regressing into marine forms, he used to go down to the Bay and collect a wastebasket full of marine detritus - shells, kelp etc - and keep it on his desk till it stank beyond endurance.
Aaron's passion for the work he does here is shared by ILM colleagues who are significantly older than him: this company feels young, but does not discriminate against the middle-aged. Hal Hickel, a leading animation director, began his career doing stop-frame animation of singing raisins for a cereal commercial. He first applied to work with Lucas back in the 1970s, and received a polite letter of rejection (the letter is now framed on his office wall). So what advice does he now give to young people who want to work in the field? The answer is immediate: "LEARN TO DRAW! It's the indispensable tool. The software we have is now so artist-friendly that it takes next to no time to learn how to use it, but if you don't have the basic compositional skills taught in drawing classes you will never be much good..."
The same wisdom is delivered by David Marsh, an affable Englishman who declares his roots by the giant black-and-white pictures of Daleks on his office walls. David demonstrates exactly how the process of digital "painting-in" lends heightened reality to the animations he is given. Once again, it's Bill Nighy's faceful of tentacles that provides the best display. Put in a little of that famous Sub-Surface Scattering and a very good cartoon suddenly becomes all too plausibly real. David points with pride to the faint tinge of pink that now adorns Davy Jones's substitute for a nose, his blow-hole.
So where is it all going to end? What is the Holy Grail for the ILM conjurers? David has no doubt: "The Holy Gail has got to be believable, digitised human beings. That's a while away now... Give us five or six years." David's peers all seem to agree that a digital actor - a "synthespian" - is the next great goal; they only differ on the timetable. One of them thinks it could be a matter of two or three years: very few viewers, he observes, noticed that the baby in the Lemony Snicket film was entirely digital. Expect to see Humphrey Bogart and Bette Davis starring in the hottest film of summer 2012.
It's very hard not to succumb to the charm of ILM's artist-workers: their evident relish in being paid to do what they love doing, their youthful bounciness and optimism, their ambition constantly to set themselves impossible tasks, pull them off and then go on to still more impossible tasks - all of this diffuses cynicism. It would seem churlish to suggest out loud that the visual miracles they work on a daily basis have served an infantilising tendency in American cinema, or that the constant striving for ever-more eye-popping effects is not merely numbing in the long run but has gone hand in hand with a conspicuous decline in other skills: witty, literate, adult screenwriting, for one. Churlish, but not so far from the truth.
Such grumpy thoughts are, to be sure, the mark of an ageing curmudgeon. Audiences old enough to have laughed and hollered along with the first Star Wars were, on the whole, bored rigid by its modern counterpart The Phantom Menace. Despite the razzle-dazzle, they found it flat, repetitious, confusing, heartless and just plain silly. But their little kids loved it, and they are the future. Thanks to ILM, it would now be possible - technically, if not economically - to make a faithful film of the Divine Comedy or Paradise Lost. Maybe the Dantes and Miltons of 21st-century cinema are already out there, steadily plotting to take the freedoms, the boundless potential of ILM-style film-making to new artistic peaks. Or maybe audiences will grow so sated with mere passive gawping that realist, humanist cinema will strike back.
The likeliest quality of any such prediction is that it will prove every bit as accurate as the 1970s wisdom that science fiction had no future.
* The DVD of 'Pirates of the Caribbean - Dead Man's Chest' goes on sale on 20 NovemberReuse content