First the bad, all over this movie screams rush job. Looking at the people behind the movie it comes crystal why. Tommy Lee Wallace both a writer and director on H3 also had Amityville 2 the same year. John Carpenter also had a little film called 'The Thing' the same year. On top of 'Escape From New York' and 'Halloween 2' the previous year. 'The Thing' bombed at the box office as well. H3 was released one year after H2. The soundtrack is loud and obnoxious along with script issues. The story jumps around missing key pieces of information.
Box office influence, Saying H3 bombed at the box office is simply not true, on a budget of 2.5 million it made 14.4 million during its theatrical run. When placed next to Halloween's numbers of a budget of three hundred thousand and making 47 million it looks like a failure. The year of 1982 itself was some of the problem. A number of big movies came out at that time. ET, Rocky 3, Star Trek 2, Poltergeist, First Blood, Blade Runner, The Thing. Plus a number of horror movies Creep Show, Poltergeist, Cat People, Slumber Party Massacre, Basket Case, Tenebre, Q (highly recommend checking out this film), and Alone in the Dark to name a few. In 1978 there was much less competition. Sure some horror movies came out in 78' but they didn't bring in much money; Piranha 16 million, and Dawn of the Dead 5 million. It was harder for a movie in 1982 to complete for a customers dollar. It didn't help the studios were cranking out garbage killing the genre. Friday the 13th 2 came out in 1981 followed by part 3 in 1982. There was an over saturation of the horror market that year.