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Sequência vs. continuação vs. sequela

While sequência, continuação, and sequela all relate to the concept of a sequel in English, their usage helps distinguish between narrative flow, numerical order, and regional differences between Brazilian and European Portuguese.

Sequência

B1
This is the most common and standard term in Brazilian Portuguese for a work that follows another, such as a movie, book, or video game. It implies a chronological succession or an ordered series.
A sequência do filme estreia nos cinemas na próxima semana.
(The movie sequel premieres in theaters next week.)
Os fãs estão ansiosos pela sequência do jogo de RPG.
(Fans are anxious for the sequel to the RPG game.)
O autor disse que não escreverá uma sequência para este romance.
(The author said he will not write a sequel to this novel.)

Continuação

B1
This word essentially means continuation. It is widely used interchangeably with sequência, but it specifically emphasizes that the story picks up where the previous one left off. It feels very natural in casual conversation.
Esta continuação é muito mais sombria que o original.
(This sequel is much darker than the original.)
Você precisa ler o primeiro livro para entender a continuação.
(You need to read the first book to understand the sequel.)
A produtora cancelou a continuação da série.
(The production company cancelled the continuation of the series.)

Sequela

B2
Examples of usage depend heavily on geography. In European Portuguese (Portugal), sequela is the standard word for a movie or book sequel. However, in Brazilian Portuguese, sequela primarily refers to a negative medical aftereffect (like a sequela of a stroke). Brazilian speakers usually avoid this word for movies unless influenced by the English word sequel.
Em Portugal, a sequela do filme foi um grande sucesso de bilheteira.
(In Portugal, the film sequel was a great box office success.)
O diretor português anunciou o lançamento da sequela.
(The Portuguese director announced the release of the sequel.)
Muitos brasileiros acham estranho chamar um filme de sequela.
(Many Brazilians find it strange to call a movie a sequel.)

Summary

Use sequência or continuação as safe, standard choices in Brazil for movies, books, and games. Use sequela if you are speaking European Portuguese; otherwise, in Brazil, sequela sounds like you are talking about the medical aftereffects of an injury.