SXSW Film kicked off Sunday morning with a conversation with Seth McFarlane, the mastermind behind the hit Fox television cartoon series "Family Guy," "American Dad" and "The Cleveland Show."

McFarlane spoke about the positive consequences of the cancelation of "Family Guy," which occurred after the series had only been on air for three seasons.

"The cancelation was the best thing that ever happened to the show," McFarlane said, adding that what helped to bring it back to Fox after a few years was the devotion to the cartoon shown by people who purchased the series' DVDs and watched its repeat airings on cable.

"This was an instance when people were writing letters with their checkbooks, and that brought back the show," McFarlane said.

Later in McFarlane's session, he began discussing his upcoming movie—his first motion picture project—which features a teddy bear that comes to life to serve as a child's best friend, only to grow up with the child and encounter typical adulthood issues. The star of the movie, Mark Wahlberg, made a surprise appearance to help unveil the movie. The audience also got to see an 8-minute clip of the movie, named "Ted."

The ScreenBurn Arcade, the gaming epicenter of SXSW, held its last day at the festival at the Palmer Events Center. The Arcade Stage featured big reveals from industry heavyweights, including Marvel and Bioware. Also on the stage was Critical Mass' upcoming computer game "The Boondock Saints," which is based off the 1999 movie. The stars of the movie also appeared on stage to field questions from the audience and introduce the game to SXSW.

For more pictures covering Sunday's events, check out the attached slideshow.