CONTAINS SPOILERS. WHATEVER.
And the found footage bandwagon trundles tediously on. Pretty much identical to the first two Paranormal Activity movies - long stretches of murky lo-fi night vision occasionally interrupted by very slight movement, indistinct noises or things going thud for no reason - this is no better for having the mythology and characters already established in the earlier films because it spends time setting everything up rather than leaping straight into the action, and when the action does come it's pretty unremarkable (including a straight rip from the big jump moment in Paranormal Activity 2, which doesn't work a fraction as well). And for its final act it descends into typical horror movie territory which also doesn't work because it's handicapped by the found footage shooting style.
The first two films concentrated on Katie and Kristi separately; Paranormal Activity 3 looks at the two as sisters back in 1988 when the activity started, possibly through Kristi's imaginary friend "Toby". Initially it's just inexplicable noises off, but Dad sets up VHS camcorders in the bedrooms and lounge/kitchen to try and capture some evidence of what the mysterious presence might be. But who is "Toby" really, and what does he/it want? Will they even be safe when the flee the house and stay with their Gran? Or will the haunting follow them there?
The third act is where the film completely loses it with a melodramatic reveal that's not only staggeringly predictable (even for me, and I'm generally useless at these things) but nonsensical. Much like The Last Exorcism, the movie suddenly lurches for a payoff that doesn't fit. It's also where the rationale for the camcorder usage - which was debatable to start with - breaks down as well, as there's no longer any reason for them to keep filming everything. Aren't they safe now? Yet he keeps on filming, and even wanders around the house in the dark - never putting a light on - with his camcorder.
The crux of it all is the damnable found footage style: a style that just doesn't work. In the Paranormal Activity films and in most others of this genre, it has never worked. One or two have carried it off - Cannibal Holocaust is still the prime example, and at least the first [Rec] managed the trick as well - but in the main it fails because it's being used for the wrong reasons. The found footage technique isn't being used because it enhances the realism and adds verisimilitude; it's being used mainly because it's cheap. Look at the costs and grosses of the first two movies: the first cost a reported $15,000 and took a hundred million in the US alone; it had made its budget back five times over on its opening weekend. PA2 inexplicably cost $2.75m (where the hell did it all go?) but still took forty million on its opening weekend (figures for both films from their IMDb pages).
Such an astronomical return on investment is obviously going to be milked for all its' worth and to hell with concerns about the aesthetic ugliness or the narrative illogic. Not only are the reasons for shooting all this uninteresting footage generally pretty flimsy (at what point does the camera operator think he should really put this huge lump of equipment down and leg it?) but the films tend to look horrible in grainy lo-def camcorder vision, and Paranormal Activity 3 is supposed to be on VHS! (On the subject of the camcorder itself: this is supposedly 1998. Shouldn't the camera be shooting in 4:3 instead of widescreen?)
The fact is that there have always been haunted house movies, and there always will be haunted house movies - and they were, are, and will be, movies. Movies with directors and actors and writers, and effects and lighting and music and editing. Nobody ever tried to pretend that The Legend Of Hell House or The Haunting (either version) were real. They didn't have to: they were movies. They weren't real and the feeble cries of "no, it's real!" is embarrassing and desperate. Here's how you know it's not real: it ends with a cast list and a caption saying "All persons and events are fictitious and any similarity.....". Stop lying to me. Stop lying to us. You're fooling no-one and you're looking stupid. Nor does it even add up logically: exactly who is supposed to have put all this footage together?
In itself, although there are a couple of moderately effective jumps, this third and hopefully final offering simply doesn't deliver. If they'd made a film - a proper film with editing and scoring and lighting, cameras that could dolly and track and zoom and tilt - then in all probability they could have produced a perfectly decent Halloween chiller. Instead, because of their tiresome stylistic choice, they're stuck with the dull visuals and vast tracts of not very much happening for a long time. Yes, there are a few scary moments, but again they're the "Boo!" variety and there's nothing unsettling or disturbing that'll last in your mind.