I really like the idea of animated Chronicles of Narnia films in general—I'd love to see the entire series rebooted maybe ten, twenty years down the line as 3D animation. Something like what you see in Disney's Tangled or Frozen could potentially be nice, but what I'd really like to see is a very unique and stylized design that draws heavily from Pauline Baynes' illustrations. I think that would be awesome.

As for The Magician's Nephew specifically, I can definitely see the pros of doing it in animation, especially when you think about scenes like the creation of Narnia. Still, it could be a rather startling change, particularly if you consider this film to be part of the current series of Narnia films.

One way you could possibly bridge the gap is by beginning the film in live action and showing a meeting of the Friends of Narnia as is described in The Last Battle. It could be the very first meeting of the Friends of Narnia, and you could bring back all of the actors for a reunion of sorts.

Professor Kirke and Polly could begin to tell the story of how they first came to Narnia—or what would become Narnia, rather—and maybe one of the younger members of the group (whoever would be the most artistically inclined) decides to draw the story as it's being told. Maybe they've even been working on a book about Narnia, a sort of journal where they detail their memories and adventures, compiling everything they know about it. As Digory and Polly begin to narrate their story, the artist begins to sketch out the opening scene of young Polly meeting young Digory in the garden. (In Pauline Baynes' style, please? ) The live action scene then begins to fade and the illustration starts to grow of its own accord, spilling across the page in incredible detail, until finally coming to life as animation, 2D or 3D.

Could end up feeling cheesy or awkward, but done well, it might work and even tie into the story's theme of creation—from an artistic standpoint, anyway. Not necessarily something I'm advocating they do, but an interesting possibility to consider, especially if they intend on having some sort of continuity throughout the series of films. Personally, I wouldn't mind at all if they made it as though it were a standalone film with no connection to the previous movies, but I don't know if that's reasonable to expect or not.

I personally wouldn't be for it. To many animated films that turn out not so great anymore. Rare to find a good one. Toy Story wins in this arena. We need more Narnia films, actual movies.