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padib said:

This thread has completely degenerated.

Nobody is talking about business success. The angle of the thread is of behaviors and ethics. The title of the thread is "Nintendo banned Square from offices for 10 years..." aka Nintendo is bad. The truth is completely the opposite, Nintendo was almost sent to financial ruin after this back-stab of a move was made, and Nintendo was just correct in reacting vehemently against it.

No matter how many posts people will make about likening this affair to Rare (wtf?) or to the success of FFVII, if we are talking who was right and who was wrong, the answer is clear, Square backstabbed Nintendo while being lured away by Sony, and the shock of everyone at Squaresoft when it happened (per the article) is proof of it. The reaction of Nintendo is proof of it. The bending-over attitude of Sony towards Square is proof of it.

And Sony is very conspicuous in its dealings with Nintendo from the get-go. Sure it's business, but there is shady business and there is legit business. What Sony and Square did, imho, was very sleazy. In contrast, the Rare buyout was all done legally and in the open between Nintendo, Rare and Microsoft, it was all legit.

And I have no idea what "jealousy of Iwata" even means, it blows my mind.

One interesting thing I've read in NeoGAF, but sadly can't find source materials behind the posts, so take it for what you will, is that Yamauchi wasn't necessarily angry with Square for jumping ship, but for supposedly talking to Enix's president and talking him into moving Dragon Quest VII onto the PS1 from the N64. If that's true, then I can definitely see why Yamauchi would have felt betrayed by Square. Holding on to Dragon Quest VII would have kept N64 competitive with PS1 in Japan, if not the US, and Dragon Quest VII would have been much easier to fit onto a N64 cartridge than FFVII-IX were since it didn't have FMV, just a butt-ton of dialogue that would have needed to be packed into the cartridge.

So it's possible that it may have been the loss of Dragon Quest VII rather than Final Fantasy VII that upset Yamauchi. And if true, that would be kind of a dick move from Square.