Shrek changed animation in a lot of ways, but most of them were very bad. Shrek had a very negative influence on the industry, and people often forget that the last dark age of animation (2006 – 2009 (not all data is going to be accurate in this post)) was largely to blame on that movie.
Before I continue though, I will say that Shrek is a great film. I watched the movie as a kid. I continue to watch it as an adult because it still holds up. However, the influence does not make me like or dislike a movie any more.
Shrek was the first main stream animated movie that managed to become popular through modern humor. The movie is an active middle finger to Disney Animation Studios with their musical fairy tales. Shrek decided to go the opposite route and acknowledge the existence of Disney’s tropes.
The movie gave them an edge with raunchy humor, pop culture references. It involved a cast of celebrities, a soundtrack that was made out of existing pop songs and even the mere concept of making the monster the good guy, so it worked great as a parody. It also had a lot of things that were new at the time, like the comic relief sidekick, the dance party ending and of course, using computer animation to tell its story.
Seeing how the movie became a monster hit, it was guaranteed from the start that there were going to be copycats and ripoffs, and it started one of the darkest ages in animation history. Suddenly everybody wanted to do what Shrek was doing without actually understanding why it worked.
Executives thought that CG had become an easy excuse for making more money and older audiences thought that raunchy pop culture humor would make it more adult. Look at films like Shark Tale, The Nut Job, Barnyard, even Disney went down this path with Chicken Little.
This trope appeared so often that it also went to television, with shows like Fanboy & Chum Chum and Butt-Ugly Martians.
And while the industry got back on its feet during the 2010’s by understanding the importance of making animation timeless again, the slow dissapearing of hand-drawn animation is still largely to blame on Shrek because of how it made Dream Works so dominant compared to Disney for such a long time.