The director originally intended to make a two-part prequel to his The Lord of the Rings series, and came under fire after announcing he would release three epics instead.
Critics accused him of trying to make more money by stretching out the classic book, but McKellen, who plays Gandalf the wizard, refutes the suggestion.
He says, "Anyone who thinks Peter Jackson would fall for market forces around him rather than artistic integrity doesn't know the guy or the body of his work. If we just made one movie, The Hobbit, the fact is that all the fans, the eight-, nine- and 10-year-old boys, they would watch it 1,000 times. Now, they've got three films they can watch 1,000 times."
Jackson explains he was able to expand the narrative by drawing from appendices Tolkien included with The Return of the King, his third and final volume of The Lord of the Rings.
Jackson tells The Hollywood Reporter, "The (Hobbit) is written in a very brisk pace, so pretty major events in the story are covered in only two or three pages... (We) wanted to do a little bit more character development, plus... we could also adapt the appendices of Return of the King, which is 100-odd pages of material that sort of takes place around the time of The Hobbit, so we wanted to expand the story of The Hobbit a little bit more, as did Tolkien himself. So all those factors combined gave us the material to do it."