Special effects are traditionally divided into the categories of optical effects and mechanical effects. With the emergence of digital film-making tools a greater distinction between special effects and visual effects has been recognized, with "visual effects" referring to digital post-production and "special effects" referring to on-set mechanical effects and in-camera optical effects.
Optical effects (also called photographic effects), are techniques in which images or film frames are created photographically, either "in-camera" using multiple exposure, mattes, or the Schüfftan process, or in post-production processes using an optical printer. An optical effect might be used to place actors or sets against a different background.
Mechanical effects (also called practical or physical effects), are usually accomplished during the live-action shooting. This includes the use of mechanized props, scenery, scale models, pyrotechnics and Atmospheric Effects: creating physical wind, rain, fog, snow, clouds etc. Making a car appear to drive by itself, or blowing up a building are examples of mechanical effects. Mechanical effects are often incorporated into set design and makeup. For example, a set may be built with break-away doors or walls, or prosthetic makeup can be used to make an actor look like a monster.
Since the 1990s, computer generated imagery (CGI) has come to the forefront of special effects technologies. CGI gives film-makers greater control, and allows many effects to be accomplished more safely and convincingly -- and even, as technology marches on, at lower costs. As a result, many optical and mechanical effects techniques have been superseded by CGI.
In 1857, Oscar Gustave Rejlander created the world's first "trick photograph" by combining different regions of 32 other photographs into a single image. In 1895, Alfred Clark created what is commonly accepted as the first-ever special effect on film. While filming a reenactment of the beheading of Mary, Queen of Scots, Clarke instructed an actor to step up to the block in Mary's costume. As the executioner brought the axe above his head, Clarke stopped the camera, had all of the actors freeze, and had the person playing Mary step off the set. He placed a Mary dummy in the actor's place, restarted filming, and allowed the executioner to bring the axe down, severing the dummy's head. “Such… techniques would remain at the heart of special effects production for the next century” (Rickitt, 10).
This was not only the first use of trickery in the cinema, it was the first type of photographic trickery that could only be done in a motion picture, i.e. the "stop trick".
In 1896, French magician Georges Méliès accidentally discovered the same "stop trick." According to Melies, his camera jammed while filming a street scene in Paris. When he screened the film, he found that the "stop trick" had caused a truck to turn into a hearse, pedestrians to change direction, and men turn into women. Melies, the stage manager at the Theatre Robert-Houdin, was inspired to develop a series of more than 500 short films, between 1914, in the process developing or inventing such techniques as multiple exposures, time-lapse photography, dissolves, and hand painted colour. Because of his ability to seemingly manipulate and transform reality with the cinematograph, the prolific Méliès is sometimes referred to as the "Cinemagician." His most famous film, Le Voyage dans la lune (1902), a whimsical parody of Jules Verne's From the Earth to the Moon, featured a combination of live action and animation, and also incorporated extensive miniature and matte painting work.
During the 1920s and 1930s, special effects techniques were improved and refined by the motion picture industry. Many techniques were modifications of illusions from the theater (such as pepper's ghost) and still photography (such as double exposure and matte compositing). Rear projection was a refinement of the use of painted backgrounds in the theater – only substituting moving pictures to create moving backgrounds.
But several techniques soon developed that, like the "stop trick", were wholly original to motion pictures. Animation, creating the illusion of motion, was accomplished with drawings (most notably by Winsor McCay in Gertie the Dinosaur) and with three-dimensional models (most notably by Willis O'Brien in The Lost World and King Kong). Many studios established in-house "special effects" departments, which were responsible for nearly all optical and mechanical aspects of motion-picture trickery.
Also, the challenge of simulating spectacle in motion encouraged the development of the use of miniatures. Naval battles could be depicted with models in studio tanks, and airplanes could be flown (and crashed) without risk of life and limb. Most impressively, miniatures and matte paintings could be used to depict worlds that never existed. Fritz Lang's film Metropolis was an early special effects spectacular, with innovative use of miniatures, matte paintings, the Schüfftan process, and complex compositing.
An important innovation in special-effects photography was the development of the optical printer. Essentially, an optical printer is a projector aiming into a camera lens, and it was developed to make copies of films for distribution. Until Linwood G. Dunn, A.S.C. refined the design and use of the optical printer, effects shots were accomplished as in-camera effects. Dunn demonstrating that it could be used to combine images in novel ways and create new illusions. One early showcase for Dunn was Orson Welles' Citizen Kane, where such locations as Xanadu (and some of Gregg Toland, A.S.C.'s famous 'deep focus' shots) were essentially created by Dunn's optical printer.
The development of color photography required greater refinement of effects techniques. Also, color enabled the development of such travelling matte techniques as bluescreen and the sodium vapor process. Many films became landmarks in special-effects accomplishments: Forbidden Planet used matte paintings, animation, and miniature work to create spectacular alien environments. In The Ten Commandments, Paramount's John P. Fulton, A.S.C., multiplied the crowds of extras in the Exodus scenes with careful compositing, depicted the massive constructions of Rameses with models, and split the Red Sea in a still-impressive combination of travelling mattes and water tanks. Ray Harryhausen extended the art of stop-motion animation with his special techniques of compositing to create spectacular fantasy adventures such as Jason and the Argonauts (whose climax, a sword battle with seven animated skeletons, is considered a landmark in special effects).
The 1970s provided two profound changes in the special effects trade. The first was economic: during the industry's recession in the late 1960s and early 1970s, many studios closed down their in-house effects houses. Many technicians became freelancers or founded their own effects companies, sometimes specializing on particular techniques (opticals, animation, etc.).
The second was precipitated by the blockbuster success of two science fiction and fantasy films in 1977. George Lucas's Star Wars ushered in an era of fantasy films with expensive and impressive special-effects. Effects supervisor John Dykstra, A.S.C. and crew developed many improvements in existing effects technology. They developed a computer-controlled camera rig called the "Dykstraflex" that allowed precise repeatability of camera motion, greatly facilitating travelling-matte compositing. Degradation of film images during compositing was minimized by other innovations: the Dykstraflex used VistaVision cameras that photographed widescreen images horizontally along stock, using far more of the film per frame, and thinner-emulsion filmstocks were used in the compositing process. The effects crew assembled by Lucas and Dykstra was dubbed Industrial Light and Magic, and since 1977 has spearheaded most effects innovations.
That same year, Steven Spielberg's film Close Encounters of the Third Kind boasted a finale with impressive special effects by 2001 veteran Douglas Trumbull. In addition to developing his own motion-control system, Trumbull also developed techniques for creating intentional "lens flare" (the shapes created by light reflecting in camera lenses) to provide the film's undefinable shapes of flying saucers.
The success of these films, and others since, has prompted massive studio investment in effects-heavy fantasy films. This has fuelled the establishment of many independent effects houses, a tremendous degree of refinement of existing techniques, and the development of new techniques such as CGI. It has also encouraged within the industry a greater distinction between special effects and visual effects; the latter is used to characterize post-production and optical work, while special effects refers more often to on-set and mechanical effects.
The most spectacular use of CGI has been the creation of photographically-realistic images of fantasy creations. Images could be created in a computer using the techniques of animated cartoons or model animation. (In 1993, stop-motion animators working on the realistic dinosaurs of Steven Spielberg's Jurassic Park were retrained in the use of computer input devices.) By 1995, films such as Toy Story underscored that the distinction between live-action films and animated films was no longer clear. Other landmark examples include a moving stained-glass window in Young Sherlock Holmes, a tentacle of water in The Abyss, the remastered Yoda from Attack of the Clones, a 'liquid metal' villain in Terminator 2: Judgment Day, and hordes of armies of fantastic creatures in The Lord of the Rings trilogy.