Avatar Sequels to be Filmed in New Zealand 20th Century Fox The dramatic landscapes of New Zealand, already crowded with hobbits, wizards, orcs and X-Men, will soon be overrun by Avatar director James Cameron's giant blue Na'vi people. Reuters reports that 20th Century Fox will film three Avatar sequels in New Zealand. The announcement comes after New Zealand's government hiked its film production tax break by 10 percent. New Zealand's Economic Development minister predicted that the film shoot will create "hundreds of jobs and thousands of hours of work" across the economy. So whoever painted this enormous portrait of Smaug, the dragon from The Hobbit, on the side of a local plane can rest assured that more work is on the way.