It would not be that hard, just look at open world games. They have towns with people and all that good stuff right? So why would this be any different? The fact they did not do it with XIII is because I think they wanted to hurry it out. The next FF title will most likely be able to have all the towns we are used to. Honestly if it does not then they are just crap and should give up all IP's so a developer with passion would continue them.

They have an engine now, so maximize it and use it.

Like I was saying to Soriku above:

If they try to make FFVII like it was before - polygonal models with pre-rendered backgrounds and fixed cameras put at different points in the environment - then they'd have to make very high resolution art assets to go along with that, right? Much, much more detailed than what the PS1 game had?

The thing is that while costs for 3-D models come down with complexity, the costs of high-quality static art assets don't. That shit is (I think) all hand drawn, and hand drawn art is just as expensive now as it was back when FFVII was originally made. Even if it wasn't hand drawn, they still have to recreate all of those assets from scratch to be much more detailed, and that does innvolve hand-drawn assets, which is still going to be "Holy Shit" expensive.

The only feasible way to cut back costs on that front would be to abandon pre-rendered background altogether and try to make them like the SNES or PS2 Final Fantasies, but the PS1 Final Fantasies were made unique by that use of perspective and high-res art. If they change that, they fundamentally change the way the game looks, feels, and plays, and they know that old fans won't accept that and new fans might be brutally disappointed.

They are in a pickle.

Open world games 9 times out of 10 are one enviroment that reuse the same assets over and over and over again.  FF7 had waaaaay more settings.

Yeah it had more settings but that just makes them seem lazy. We have tons of action adventure games that go to a whole bunch of different settings with different terrains, do they not make the game because of this? No. It may take some more time, but think of the time they are saving by not already having to write a story. They have the characters already laid out. They have the settings already in place. All you need to do is update it, grab some voice actors, put some love into it, and we have us a remake.

Hey if it comes out it comes out, if not oh well. I just find his remarks irritating (Kitase, not yours)

Action adventure games go to a bunch of different settings and different terrains...

and are MUCH shorter.

They also tend to have less enemy variety.

Sure they could spend as much as FF13 on FF7... or close to it... but it wouldn't justify it in the sales department.  The only remakes I can think of that sold amazingly well was the Wii Okami, being about the same as the PS2 Okami... (Which was amazing for Okami not a FF level budget.) and super mario Allstars which was a remake of 4 games.