Watch: James Cameron discusses the use of 3D and HFR in Avatar sequel
"If you think about the way it worked back then, [3D] was a novelty," Cameron told Yahoo UK, explaining that the landscape has shifted since he debuted Avatar in stereoscopic form.
He added: "Now it has found its level as a consumer choice. At the time we had 6,000 screens worldwide that were 3D screens, now we have 120,000.
"Most big blockbuster movies are made in 3D, so people have a choice — if they like it they can see it in 3D and if they don't like it they can see it in 2D. I author it both ways."
Avatar: The Way of Water returns to Jake Sully (Sam Worthington) and Neytiri (Zoe Saldana) as they deal with the return of the 'sky people' and decide to flee their village in order to protect themselves and their fellow Na'vi.
Taking their kids along for the ride, they hole up with the water-loving Metkayina clan in an attempt to conceal themselves from the mounting threat.
Read more: How Avatar sequel pushes CGI forward
For the underwater sequences and many other scenes during the film, The Way of Water utilises high frame rate (HFR) technology — running footage at 48 frames per second rather than the industry standard of 24.
This sort of tech has been utilised in previous films including the Hobbit trilogy and Ang Lee's actioner Gemini Man, drawing criticism for its hyper-smooth feel that can sometimes feel like watching a video game cut scene.
"I don't see it as a format. It's not a format like 70mm. It's a tool, it's an authoring tool. I think we got it. I think we got it in balance," said Cameron.
He added: "The rule was that whenever they're underwater, it's 48 frames. Boom. Don't even think about it. Some of the flying scenes and some of the broad vistas benefit from 48 frames.
"If it's just people sitting around talking or walking and talking, relatively slowly evolving images, it's not necessary.
"In fact, it's actually sometimes even counter-productive because it looks a little too glassy-smooth, right? So the trick to it was to figure out where to use it and where not to use it."
Cameron said he believed the risk of deploying HFR technology was worth it, given the benefits it has in minimising some of the issues people have with 3D.
He said: "The one thing I will say pretty definitively is that 48 frames doesn't benefit a 2D movie very much, if at all. It's really about making a better experience in 3D.
"Sometimes the edge detection that our brains are trying to do to decode the parallax — I'm getting technical now — the rapid lateral displacement causes it to strobe and it basically screws with our brains. We wanted to get rid of that to make a better 3D experience."
As for the movie's story, Cameron makes no apologies for the fact he makes little allowance for anybody who isn't entirely up to date with what happened last time around — but said young audiences can hop in with the new film.
He said: "I've got five kids, they're all different ages and they're not necessarily big fans of the first Avatar — 'that's dad's thing' — but they do like the new film.
"It's more kid-focused, and I don't mean that in some insulting way like seven-year-olds. This is about teenagers and that deeply anxious, chaotic time in our lives.
"I remember it from when I was that age and I remember it as a father from when my kids are that age.
"That's what I wanted to write about. I didn't want to just do it from the father's perspective, I wanted to do it from the kids' perspective as well."
Cameron also said he was keen for his movie to have a foot in reality, even though it's set entirely on a fantastical alien world.
"I always believe that the best result in fantasy is good observation of reality, of our own natural world and the natural physics of our world," the filmmaker said.
Read more: Matt Damon regrets turning down Avatar role
He added: "Everything you see somebody doing in The Way of Water and in Avatar 3, somebody actually did it and they actually did it in the water. That was something I insisted on."
Avatar: The Way of Water is in cinemas and IMAX from 16 December.
Watch: Trailer for Avatar sequel The Way of Water