1.Hire programmers and artists, Nobuo Uematsu to do the soundtrack, and Tetsuya Nomura to design the characters with me writing the story, dialogue and designing the game. For extra measure, hire Hideo Kojima to help me with the cutscenes(I would still be in control though so no 45 minute cutscenes).
2.Make an action adventure game with RPG elements including customization, party members and a level up system with a very deep story. The combat system would be in real time. I would also make sure the game has groundbreaking visuals just because I would be able to do so with $500 million
With the rest of the money, I would make another game or two:
A first person shooter set in modern United States with subtle sci fi elements.
A Western RPG with the concept of time traveling.