Film producers decide to make a film when 1) they have an interest in the project (they like the script or they want to work with a director, writer, or star attached to it), and 2) they can get the project funded. read more
If the film warranted a sequel but wasn't successful enough to justify one, then there would be no financing available for just anyone to make it anyway. Movies cost a lot of money to make. Even the smaller ones. read more
So it’s important to look at the potential of a sequel to make more money at the box office than the previous movie. The money that film may have made for the studio in other areas; licensing, toys, cross promotion. Also to remember that whatever the film grossed, halve it and then take the FULL cost of the movie from that amount. read more