In Hollywood, 2007 is known as "the year of the threequel" -- a reference to the fact that this summer has seen the release of Spider-Man 3, Pirates of the Caribbean 3, Shrek the Third and Oceans 13, with The Bourne Ultimatum, Rush Hour 3 and Resident Evil 3 to come. So far, they've all performed below expectations at the US box office. Pirates of the Caribbean 3, in particular, was beaten in its second week of release by Knocked Up, a romantic comedy that cost approximately 0 million less to make.
Why should this be? The most obvious explanation is that moviegoers think that sequels are afflicted by the law of diminishing returns. Of course, there are exceptions to this rule, but they are nearly all the second films in the series. From Russia With Love is better than Dr No, for instance, and a case can be made for the superiority of The Godfather Part II, Dawn of the Dead, The Empire Strikes Back, Mad Max 2, Aliens, The Evil Dead II, Terminator 2, Babe: Pig in the City, Toy Story 2 and Spider-Man 2.
How many threequels are better, though? And not simply better than the first sequel -- but better than the original as well? Off the top of my head, I can only think of two: The Good, the Bad and the Ugly and The Lord of the Rings: The Return of the King. As a general rule, threequels aren't merely worse than the previous two films in the series, but so much worse that it can take decades for the franchise to recover. For instance, Die Hard: With a Vengeance was so bad that we've had to wait 12 years to see Live Free or Die Hard, the fourth film in the series.
Even if a threequel does as well at the box office as the previous two films that is no guarantee that a fourth will be made. The problem is that the cost of making a sequel increases exponentially each time so even if the film in question performs well it could still struggle to turn a profit. The rule-of-thumb in Hollywood is that a picture has to take two-and-a-half times its budget in order to cover its costs -- and considerably more if it's a summer blockbuster because the print and advertising costs are so huge. Pirates of the Caribbean 3, for instance, will have to take close to a billion dollars in order to break even.
Having said all that, I'll be first in line to see Live Free or Die Hard. It can't possibly be as good as Die Hard, but if it's on a par with Die Hard 2 I'll be happy.