Box Office Bomb: The second and third movies in the U.S. For The Next Chapter, Budget, $36 million. Box office, $17 million (domestic), $56,468,971 (worldwide). This led to the third unrelated film having a budget of $17 million. Box office, $5 million in Germany, but allegedly not even 5 figures in the States, where it screened in limited release, was ripped to shreds, and eventually came Direct-to-Video without Warner's involvement (Disney/Miramax distributed it instead).
Dawson Casting: The "high school students" in III are in their mid-20's - or older. Similarly, Julie Cox is cast as the "Childlike" Empress despite being 21 by the time the film came out, which is noticeable in that she was actually taller than Jason James Richter, who played Bastian in that film.
Disowned Adaptation: Michael Ende filed an injunction to stop the production of the film, or failing that prevent them from using the title of his novel. He was unsuccessful, and demanded that his name be removed from the credits. He particularly took issue with the film's ending, which shows Fantasia restored with little creative input from Bastian and also shows Falkor crossing into the real world (noted to be impossible in the novel, as Fantasticans who enter the real world become lies). This is why Ende's name is not referenced in the film's opening credits.
Enforced Method Acting: That look of shock on Atreyu's face and how dazed he looks getting up after he kills Gmork? That was real. Apparently, they didn't realize how heavy the mechanical wolf puppet could be, and when they shot the scene, it almost knocked out Atreyu's actor. They decided not to try for a second shot after he revealed the claws almost poked out one of his eyes too.
Executive Meddling: After the first film's test screenings revealed that audiences were not enthused with Klaus Doldinger's score, the studio commissioned Giorgio Moroder to replace some of the original music with his own. Wolfgang Petersen was not pleased, though the title song became one of the most memorable aspects of the film to many viewers.
Franchise Killer: The third film only scored a 14% on Rotten Tomatoes and killed the franchise completely. Characters didn't retain their original personalities, Atreyu being absent and the series' iconic theme song at the end of the movie (which reused a "Born to Be Wild" rendition) were the final nails in this film's bookcover.
The Other Darrin: The second movie has only one of the main actors from the first movie, and the third movie doesn't have any of them.
Playing Against Type: Jack Black, who is typically known for playing somewhat bumbling yet lovable misfits, is the Big Bad of the third film.
Troubled Production: As the most expensive movie made in Germany up to that time (and, indeed, the most expensive movie made outside the US or USSR at that time), it's hardly surprising that things went wrong in many ways, as actors got injured, the weather was scorching hot and scenes were cut after the Swamp Sadness spent too much money. Producer Dieter Geissler decided not to endure everything again by spending a whole year with pre-production when doing The Next Chapter.
Vaporware: German game developer Discreet Monsters' The Real Neverending Story, which wasn't really getting anywhere even before Discreet Monsters was felled by the end of a tech bubble. The main personnel involved eventually produced a much less ambitious game, Auryn Quest.
Ygramul the Many was intended to appear—the sequence was scripted and storyboarded—but cancelled due to the special effects limitations of the time. This scene would have explained why the gnomes are seen giving Atreyu and Falcor heavy doses of medicine, as Ygramul was a hive-minded swarm of deadly poisonous wasps.
The same goes for the Wind Giants from the book—when the crew weren't able to convincingly create giant cloud beings, the scene was re-cut into Atreyu and Falcor's close encounter with The Nothing (the line "Look Atreyu, The Nothing!" from Falcor being dubbed in).
Atreyu was actually supposed to appear as a main character in the ''Never Ending Story 3', ending up in Las Vegas as a result of Bastian's wish overload.