My rules for sequels are as follows:
One game per series per console. Mario has done this since the SNES (though Yoshi's Island is debatable since it's so different and considered more of a Yoshi game), Metroid used to do this, the Chrono series does this, etc.
There are some exceptions:
1. This rule doesn't include spin-offs which are considered a different entity.
2. An exception is made for simultaneous releases designed to interface with each other (Pokemon, Zelda Oracle games) in which case each pair counts as one sequel. Ports and remakes also are not considered sequels.
3. Sports games do not have to follow this format.
4. A series can have as many sequels as it wants provided the franchise has a definitive end. So the original Phantasy Star is exempt because the series quit after the fourth game.
5. Some series are granted a special priviledge to release several sequels per console. The Legend of Zelda is allowed two per console because of it's high quality. Final Fantasy is permitted three per console because it changes the story, characters, and battle system with every game.
6. A game is allowed a direct sequel on the same console if the preceding game is either brand new or takes the franchise in a new direction (2D to 3D) and is a smashing success. The direct sequel is permitted to cash in on the game's popularity but a third game on the same console is not permitted. So Metroid Prime 2, Vice City, Halo 2, etc are all valid sequels.
The trilogy curse:
Any new series that releases three games on it's debut console will never regain it's previous success. It's just a fact. Donkey Kong Country, Mega Man X, Mortal Kombat, Resident Evil all released a trilogy on their debut console and never really regained their popularity with the fourth title. Mario is currently the only series to recover from this after releasing a trilogy on the NES and maintaining momentum with Super Mario World.
PC game rules:
Since PC games are all on the same "console" the rules are different. Only one expansion pack per game and each game must be released at least three years apart. Blizzard follows this rule perfectly.