Nintendo and Square Enix

[PAOerfulone]

A whole lot of interesting back and forth between the 2 companies this generation, the good kind too!
Notice how many of Square Enix's best selling titles have been on Nintendo systems.
Kingdom Hearts: Dream Drop Distance
Dragon Quests VII and VIII - Both of which are getting international releases
Bravely Default, and soon Bravely Second is coming.
And Nintendo has been highlighting many of their games in their own Directs including the above mentioned.

Plus, there's also the fact how Square Enix let a little word slip about NX, and the possibility of Dragon Quest XI appearing on it. They of course had to keep quiet about it by Nintendo. But the possibility is now out there.

So clearly they've got a good relationship going, but as if that wasn't enough:
Cloud Strife, one of the most iconic video game characters on the planet and the poster boy of Square Enix's most popular and successful franchise, Final Fantasy, is now going to appear as a playable DLC fighter in Super Smash Bros. 4! Cloud is actually going to duke it out with Mario, Link, and co. after all these years!!!
Just what does this all mean as far as the two companies working together goes?
With NX just around the horizon, and given how one of the Wii U's glaring issues has been a severe lack of 3rd party support, Nintendo is trying to address that issue, and they appear to have gotten Square Enix on their side.
Could we see even more Square Enix characters in Smash Bros. like: Sora? some Dragon Quest character? Geno from Super Mario RPG?
Square Enix appears to be eager to support the NX, whatever it might be.
So the question is: What exactly going on between Nintendo and Square Enix?