The Avatar sequel will be shot outside the US in what could be considered as another blow to Hollywood.

Arguably one of the biggest sequels yet to be made ‘Avatar 2′ is benefitting from a 25% tax break in New Zealand according to THR, which will help reduce the overall costs of the huge production budget, at the expense of local production in Hollywood.

With films like Disney’s epic ‘Star Wars 7′ and action/adventure ‘Fury’ being shot abroad in the UK, is Hollywood moviemaking becoming less lucrative in the US?

According to the latest government figures, Hollywood production accounted for nearly 3% of U.S GDP.

Recent frustrations from studio execs underscored a pessimistic outlook on film production jobs remaining in the state with less favorable tax breaks. VFX hubs in Toronto and London are currently more competitive on costs.

The production deal signed with the New Zealand government for the Avatar sequel is worth over $400 million. So to that end, can we expect more big blockbusters to be shot abroad? Most likely, unless there’s a significant incentive to shoot in Hollywood.