Obviously money plays a big part of it, and if Avatar had bombed at the box office, there's no way they would have gone into production on three sequels. In the case with Avatar, it's probably a combination of them dropping two trucks of cash on James Cameron's front lawn, and Cameron himself being interested, because after all he spent like half his life developing the first Avatar, so of course he would be interested in seeing where he could go next. He has reached that stage where he can do pretty much whatever he wants with it, and the studio trusts him, so why wouldn't he do it?
The story will really be the interesting part of where they take this. Because you can say what you want about the first movie, some people (like myself) thought the clichéd plot and thin characters brought the movie down, others didn't care about it. Say what you want about it, the first movie wasn't a success because of the plot. It was serviceable, but it was all about the visuals. With the sequels, I don't think they can get away as easily, and this time people expect more, considering the success of the first one. And especially considering they are making not one, not two, but THREE sequels all at once, they really need something special plot-wise to keep the steam going for another three movies. If the second one has a really compelling story and sets up a really interesting scenario for the sequels, this new trilogy could be great, but it all depends on Avatar 2.