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James Cameron's Avatar is widely considered by most to be a live-action film; even the Academy Awards themselves consider it so. This is because in order for a film to be considered animated by the academy, 75% of the film must be animated. Only 60% of Avatar is CGI. However, the digitally created backgrounds are not accounted for in this figure, which becomes a point of contention. The computer generated backgrounds of traditional animation, like Pixar films, are counted as animation. More recently, this quandary can be seen with Disney's 2019 remake of The Lion King. All 1600 shots of the film contained CGI, and every character was created using CGI. For all intents and purposes, the film was animated. However, in a Disney press release later that year Frozen 2 was touted as being the highest grossing animated film of all time, even though The Lion King (2019) made $1.657 billion to Frozen 2's $1.326 billion. So, while the Academy may have a stated criteria, their inconsistency in determining what is an animated element suggests that a singular, inclusive, "Best Picture" category would be ideal.
The Academy may be inconsistent in determining which aspects of a film count as animation and which aspects do not, however they are still the most qualified to do so. Changing the awards to have two Best Picture awards, one for animated films and one for live action films, would be the best option. At the very least, the Academy will be consistent with their inconsistency when it comes to determining what films go in which category. Further, it will allow them to compare films that are similar, rather than comparing a wholly-animated film to a wholly live action film.
[P1] Continuing to allow animated films to be nominated for the "Best Picture" category would nullify the inconsistencies in the academy's process of determining if a film is animated.
Rejecting the premises
[Rejecting P1] Continuing to allow animated films to be nominated for "Best Picture" creates problems further down the line, as it becomes increasingly difficult to compare live action films and animated films.