Years ago, I would have put this down to a resounding YES, but after plenty of research into the state of 3rd party development at the time, a lot were done with the way that Nintendo dictated things. Besides the whole control over media/licensing/ROM chips, Nintendo walked over quite a few prominent companies at the time (Argonaut and DMA Design immediately come to mind). Other developers were observing this.
Sure, Squaresoft was loyal to the point that they would have stuck with Nintendo had they provided a proper medium for FF7, but don't forget that Sony helped Squaresoft by sinking millions of dollars into a massive advertising campaign. It would be difficult to see FF7 being as successful as it was without that help.
I'd say the resulting sales would have been closer, but I still think the PlayStation might have still just skimmed ahead by a narrow margin.
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