So the 130 Million he personally put up for menace would not hurt as much with merchandising involved?
Even Peter Jackson who calls himself an independent needed studio backing for lord of the rings. Lucas funding the prequels for whatever the total cost before gross profits is pretty much unheard of as far as i know.
This is why he had to keep costs down, use cgi and do them cheap, and streamline the process so he used Video on clones and sith instead of film.
I am sure in the beginning it costs more but as he went along he would save in the long run?
We know he had fox put up the money for the 1997 special edition restoration, the prints and distribution costs handled by them. they gave Star Wars copyright back to Lucas too all in exchange for the right to distribute the prequel trilogy, the last part never confirmed but certain.
I can sort of see Lucas thinking on Clones and Sith, let skip a step instead of digitizing the film and then editing it digitally, since the final product is going to be digital anyways before printing back to film, if not projected DLP, then why not skip the whole film process altogether.
Though i am personally against the use of digital instead of 35mm i think digital looks like video.
I did not feel any different with Avatar either.
I will wait to see P.J.'s Hobbit before i make my review of the red digital epic camera capable of 5k resolution. Better than film. But does not mean without the grain structure its going to be as nice as film looks to me at least in terms of aesthetics.