Culture: Wallace & Gromit flushed out of LA

One of the highlights of the BBC's Christmas TV schedule will be A Matter of Loaf and Death, a new Wallace & Gromit film. This will mark the duo's return to the small screen after what turned out to be a fairly mixed Hollywood career for their creator, Nick Park.

DreamWorks – the studio behind Shrek and Kung Fu Panda – terminated its relationship with Aardman, Park's Bristol-based film production company, which makes Wallace & Gromit, in 2007 after the disappointing box-office performance of Flushed Away (2006). In spite of clocking up $176m worldwide, the film lost $109m, according to DreamWorks. Wallace & Gromit in the Curse of the Were-Rabbit (2005) had fared better, taking $192m around the world, but DreamWorks still claimed a loss of $25m.

Dave Sproxton, the co-founder of Aardman, was bullish about this setback at the time, claiming it was due to the studio's short-sightedness. "We're Europeans with a European sensibility," he said. "Our films have played better in the UK and Europe than they have in the States, and DreamWorks is an American-based company with quite an American-centric view of where the key market is."

Aardman subsequently signed a three-year deal with Sony Pictures Entertainment, claiming it intended to double its feature output to one film every 18 months – but so far there's no sign of anything in the pipeline. With the exception of Shaun the Sheep, a successful children's TV show on the BBC, Aardman has been pretty inactive since parting company with DreamWorks. A Matter of Loaf and Death is its first major production since Flushed Away.

Aardman has generated enough good will in Hollywood to persuade a studio to finance one more roll of the dice. But feature success will probably always elude the company because of the expense of animated films. Flushed Away, for instance, cost $140m. For DreamWorks to have recouped its investment, it would have had to have taken somewhere between two and three times that at the box office. Not even Chicken Run (2000), Aardman's most successful feature to date, managed that. In the long term, Wallace & Gromit's future lies on the small screen.