Around this time, Universal Pictures wanted to start making and releasing animations. Disney and Iwerks decided to make an animated character that they could sell to Universal. What they came up with was Oswald the Lucky Rabbit. Disney and Iwerks signed a contract with Universal and Oswald became Universal's first animated series. On 5 September 1927, the first Oswald short was released, titled Trolley Troubles.
In the spring of 1928, Disney traveled to New York City to attempt to negotiate a more profitable contract. As the economy was already in a slump at the time, Universal cancelled Disney's contract. As Universal owned the rights to Oswald, Disney wasn't allowed to keep him, even though he created him and drew the shorts himself.
On the train ride back home, Disney and Iwerks brainstormed to find a new character they could use. By the time they made it back home, they had came up with the idea of a mouse named Mortimer Mouse. When Disney told his wife, she said that name didn't sound pleasant at all, and suggested naming him Mickey Mouse.
Meanwhile, Universal continued using Oswald, even making a sound short in 1929, until 1951, as a cameo in a Woody Woodpecker short.
In February 2006, Disney CEO Bob Iger and Universal agreed on a trade. Disney gave ESPN Sportscaster Al Michaels to NBC Sports, and in exchange Universal gave Disney the rights to Oswald, including the rights to the shorts Disney has worked on. Disney's daughter, Diane Disney Miller had this to say about the exchange:
"When Bob was named CEO, he told me he wanted to bring Oswald back to Disney, and I appreciate that he is a man of his word. Having Oswald around again is going to be a lot of fun."
Al Michaels, who Disney traded for Oswald, had this to say:
"Oswald is definitely worth more than a fourth-round draft choice. I'm going to be a trivia answer someday."
In 2010, Oswald was one of the main protagonists in the video game Epic Mickey, as leader of forgotten cartoon characters.
Mickey Mouse and Oswald the Lucky Rabbit