The original movie was set in 2006 (which was contemporary at the time of production, the film just took 3 years to get released), with the sequel being a prequel which turned into a "sidequel", leading to the third movie which went back to the 1980s.
The prequel approach worked for two movies, they added detail to the events of the first movie and actually enhanced the experience by association. That is a rarity for sequels or prequels. That said, Paranormal Activity 4 wisely moves the story forward before is the first real continuation of the story. I feared the series would continue moving backwards in time until Paranormal Activity 6 was just a flip-book of doors slamming shut.
Paranormal Activity 4 is set in 2011 and deals with a normal everyday family with an over-reliance on video equipment. It seems that Katie and little Hunter, who were last seen leaving a multiple murder scene in the second movie, have settled down in a new neighbourhood and brought a lot of crazy juju with them.
Paranormal Activity 3 directors Ariel Schulman and Henry Joost return to helm this latest sequel and they appear to be bringing the same variety back to the franchise; whereas the previous film ingeniously used rotating cameras to build and pay off tension, Paranormal Activity 4 is making use of a mixture of modern video sources like cell phones, Skype and even Xbox Kinect. Even when you see the 20th person being pulled across the floor, you cannot fault the film-makers for their imagination.
Paranormal Activity 4 will be spooking up cinemas in October.