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If it's true then I would suspect it's a decision that was made recently in light of the Switch's success. If they show i at E3 I don't expect to see any footage from the Switch build.

From what we know it could happen somewhere down the line. It shouldn't be too difficult to downgrade an Unreal game for the Switch, and both Square and Nintendo would love the publicity of FF7 finally being released in some form on a Nintendo system. I just have my doubts that it's been worked on for more than a couple of months if it's been worked on at all.