It is common knowledge that Lucas intends to shoot the next two films entirely digitally. In a press release Sony announced a venture with Panavision and Lucasfilm to design and provide "24 Frame Progressive High Definition Digital Electronic Cinematography Format" digital cameras for shooting Episode 2 and 3.

Driven by a desire to both control escalating costs of producing major movies and extend creative flexibilities to the shooting stage, Lucasfilm approached Sony in 1996 to explore the possibilities of developing a 24 frame progressive scan digital HD production system. In November of that year, an agreement in principle was reached for Sony to embark on such a system design, and preliminary development began in 1997. The 24 frame electronic cinematography project is now in full swing, with regular meetings between the Lucas companies, Panavision, and Sony design teams. The first prototype camcorders will be delivered to Lucasfilm in the fall of this year for testing with the Panavision lenses.

In 1998, Lucasfilm instituted a series of extensive testing to explore lens criteria for an HD motion picture camera, and to evaluate total system performance from the original electronic shoot to the final transfer to 35mm motion picture film. Panavision joined these tests.

That Summer, a series of scenes for ""Star Wars: Episode I The Phantom Menace'' were shot on stage in London, with Sony's HDC-750 high definition camera (in the 1920x1035/60i format). Digital recordings were made on both the new HDCAM(r) format and the baseband HDD-1000 VTR. Evaluations were made of both recording formats transferred to 35mm film. Some of the scenes have been incorporated into the movie, constituting a ""real-world'' test of the technology, as well as creating a prelude to the plan for use of the 24 frame progressive HD system in shooting ""Star Wars Episode II,'' which begins in Spring 2000.

""This working relationship between ourselves, Sony, and Panavision, represents a model for an industry seeking to capitalize on fast-developing breakthroughs in digital imaging,'' said Rick McCallum, producer of ""Star Wars: Episode I: The Phantom Menace.''

""Sony's technology, combined with our own quest for visual innovation, promises exciting change in the not too distant future,'' McCallum added.