Nintendo banned Square from their offices for 10 years after FFVII went to PlayStation. EDIT: japanese business model is akin to Yakuza

[Metallox]

Leynos said:

SanAndreasX said:

Yamauchi did extend an olive branch to Square in the mid 00s by investing money in a Square shell corporation, Game Designer Studio, which got FF Crystal Chronicles released on the Gamecube, published by Nintendo. Pretty sure the Square Enix merger helped too. Nintendo always had a better relationship with Enix than Square. Even now, Nintendo tends to favor Dragon Quest over Final Fantasy. 

Square, meanwhile, built the PS1 and then collapsed under its own weight in a few short years, especially after their disastrous foray into movie-making. :(

Which they never gave up on. Advent Children and Kingsglaive. Sakaguchi was gone soon after and FF has not reached those heights again in quality. Tho I liked 12. 13 sucked. XV is blah. Kinda funny Tak and Guchi leave Square and IMO since made better RPGs than any FF game since that time. Lost Odyssey. The Last Story. Xenoblade. Then again Taks vision of Final Fantasy VII eventually got spun into its own IP. Xenogears which is easily one of the best RPGs on PS1.

They gave up on it, those movies are just part of the afterthought. Though in fairness, their CGI has always been among the best in the business, if not the very best. Real time graphics too. FFXIII was crazy in its day, XV as well, and the jump between the latter and VII Remake is insane.