I thought the first rule of making sequels is that the first sequel that does not make money is the last sequel.
I think you are right. And there’s a related rule, that you reach a point of diminishing returns on sequels.
So say you have a bit hit movie, and they decide to do a sequel. The actors and actresses will need to be paid much more for a sequel, in most cases. And since sequels often don’t do as well at the box office, the combination of higher costs to make the movie and less ticket revenue results in diminishing returns over time.
Some franchises run their course, as the fan base doesn’t go to see sequels. I think by the time they got to Rocky 6 or 7, whichever was the last, that series had run out of gas.
The third rule of sequels is Hollywood will keep pushing out sequels to a successful movie until the box office return doesn't... return.
And some get reborn. Rocky 1,2,3 were great. 4 and 5 were middling to bad. But 6 = Rocky Balboa was superb. And Creed was very good as well.