A chat with the creative exec behind “Madagascar 3″ by Daniel Roberts @FortuneMagazine July 20, 2012, 2:45 PM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Don’t knock the sequel.Animated movie series continue to do well, conquering the box office even when they get into the third or fourth installment. Look at Shrek or Kung Fu Panda, both from DreamWorks Animation, up to their fourth (and final) installment and in-the-works third installment, respectively. And now Madagascar 3 is raking it in after a $60.3 million opening weekend in June and a No. 1 repeat on its second weekend. The film surpassed $200 million in the U.S. and $270 million worldwide.Bill Damaschke, the 48-year-old chief creative officer at DreamWorks, oversaw creative production and development of the movie, as he does for all of the studio’s feature projects. He is also heavily involved in all of its live theater productions. Damaschke stopped by the Fortune offices in late June. Below is an edited transcript of the conversation.Fortune: You’ve had an interesting career arc: you started as a stage actor in New York and then joined DreamWorks in 1995, working on Prince of Egypt,and rose up the ranks. What’s your day-to-day involvement at the studio?Bill Damaschke: Our biggest project that’s out now, obviously, is Madagascar 3. I was involved in the actual editing process, and I worked with the writers and animators in the early stages. It’s a great, nervous feeling to let it go now and watch the response and see people enjoying it at the New York premiere.Now we’re focusing on other movies, like Rise of the Guardians, which is about childhood icons like the Easter Bunny and the Tooth Fairy. It’s based on the Bill Joyce kids books [The Guardians of Childhood series] and there’s a real contrast between that and Madagascar 3 in terms of the style.MORE: A founder’s bold gamble on PaneraWhat are the challenges of rolling out a new film like that, and introducing it to people who know the books as well as those who might not?Well, we screened a few minutes of it at Cannes and everyone said, “Oh, it’s the animated Avengers.”Is that frustrating?No, I’m comfortable with that analogy as long as it doesn’t come with the burden of having to perform on that level. [The Avengers had the biggest opening weekend in history, with $200 million in its first two days.] When a movie is that big, it’s what everyone is talking about and thinking about, and it makes sense.Is there a danger to doing sequels, a fear of overdoing it or annoying viewers?As long as the movie stands alone, as well as being part of a series, it’s okay. I don’t think people get annoyed if each movie is actually good.It’s funny, people look at something like Shrek: the Musical and they say, ‘Oh, they just want to make more money.’ And if they even knew how many people it takes, how much work, how many hours, and what a challenge it is to pull off… I mean, it is not about cranking something out for money.But when a profitable movie franchise turns into a play, and a video game, and all manner of other spinoffs, how do you keep each thing fresh and exciting?I think the best example I can use is our How to Train Your Dragon Live Spectacular, which is a live arena show that came out of our 2010 movie [How to Train Your Dragon]. It’s starting its U.S. arena tour right now, and this thing sells out. It allows for an audience of 3,000 to 6,000 people. [It’s also scheduled to play soon in major venues like the Staples Center in L.A.]MORE: The nail-biting life of an action film directorIt’s a live show sort of like Yo Gabba Gabba, except that it tells a story. I don’t know that audiences are used to going to a big arena to see a story. You certainly don’t need to have seen or know about How to Train Your Dragon to go enjoy this. The show debuted in Australia in March and it comes to the U.S. this month, after doing really well in Australia and New Zealand, which is interesting because Madagascar 3 is also doing especially well in places like Russia. [Indeed, it is now the highest-grossing animated film of all time in Russia and the country’s third-highest grossing movie of any genre.]Internationally, do you think it’s hard to compete with a studio like Pixar, which seems to get really wide acclaim for every new movie it puts out?I think Pixar is great; I love their movies. I go see all the animated movies, the ones we make and the ones we don’t, and I enjoy most of them, but I think our style is very different from Pixar’s.One thing I’ll say that can be frustrating is that the live-action business doesn’t have the kind of scrutiny that animation does. Critics don’t compare Men In Black 3 to The Avengers. But in the press, all of our movies do get compared to other animated movies and to Pixar’s movies. With Madagascar 3, and Me and My Shadow, which will combine different types of animation, I’d say we’re doing really interesting things and that audiences are responding.Speaking of the visuals, every animated movie comes out in 3D now. Is there any danger of flooding the market too much with that technology?It sure doesn’t seem like it. Fifty to sixty-five percent of box office revenues for our movies are now from the 3D versions, and that number is particularly high internationally. If 3D is used the right way and it adds a new level to the experience, I think it’s wonderful. I don’t see it going away any time soon, and now they do it with non-animated movies, of course, and people are happy to pay a little more to enjoy that. Little kids today know how to use an iPad almost intuitively. I think they’re raised expecting 3D graphics in every movie.It’s crazy.Yes!