1. Competition. I don't recall so many JRPGs in early 2020 and so many announced for 2020 when Remake came out.
2. Less PS5 consoles in Japan and globally than PS4 (logical).
3. Remake (Part I) showed that the FFVII remake was top-to-bottom in many ways. It's a reimagining remake. Some people loved the changes, some didn't. And we now know the Remake will be 3 games. That was speculated back in 2020, but it could've been 4 or 5 for all we knew.
4. Price. PS5 games are more expensive.

SE splitting it into parts was more for being able to make more money over the long-term, an ideal I didn't agree with when it was first announced years back.

For an RPG, you need a complete story, not have it sliced and diced up into pieces to be sold every 1-2 years, and we all know FF, let alone FFVII is not on LotR level of writing, to be able to be sold in multiple books and movies to tell the tale, it's just not the franchise to do that with, but with LotR it made sense for Tolkien, because he was telling us an epic tale, a stupidly large journey of sorts, while FF VII is just some characters, a city and a dead civilisation. 

Aye, I've played both turn based and real time RPG's, both have had their good and their bad, but when someone says "turn based is objectively better than real time", I know they are wrong, because it is purely down to preference, and some seem to have forgotten that we all have biases and preferences, but at times think they aren't a preference but more as an objective matter. Like I don't mind Yakuza splitting in two, because I know Sega are still serving real time Yakuza players and now turn based ones, which seems to be the reverse of what SE is doing, where they served turn based fans for nearly 2 decades, and then opting to now serve real time players (even though they re-release their older TB games to still cater to those fans).

People don't understand that ff16 3 million was mostly in us and Europe. Japan is always a small part

Since people keep bringing up install base and I'm saying in this moment it doesn't matter. I'll prove my case using FF13 trilogy.
PS3 install base when FF13 launched: 4.3 million. Sold 220k during FF13 launch week and 75k the previous week.
FF13 launched with 1.5 million on that 4.3 million install base.
FF13-2 launched with 520k sales with an install base of 7.5 million.
Lightning Returns FF13 launched with 277k sales with an install base of 9.5 million.

There was way less interest in the newer entries. The same can be said with FF7 Rebirth. FF7 Remake was very decisive, so obviously a lot of people would have no interest in it's sequel. It doesn't help that since FF13 Square Enix have "tainted" the FF franchise for Japanese fans. Final Fantasy used to be massive in Japan, now it isn't. This isn't an install base issue, it's a franchise issue. FF7 Remake sold 7 million in 3+ years. I do not see FF7 Rebirth coming close to that.

To tell you truth, I disagree with you on this point. If they had remade FF7 as one game, it would be missing so much of what has made the remake series what it is. Its possible that Square Enix decided to go down this road for finanical reasons. I don't blame them on that front because a lot of game studios are making big game worlds, like God of War and God of War Ragnarok, Horizon, The Last of Us to name a few.

I mean God of War has effectively become an action RPG franchise, yet its one story told over the course of two games. Final Fantasy 7 Remake is the same thing, one story told over the course of three games.

Yes I appreciate that SE could have condensed everything into one game or two, but I feel it would have been a huge injustice to Final Fantasy had they have done that. For example characters who had only a minor supporting role, Biggs, Wedge and Jessie have  more depth and more development devoted to them. We would have never had that level of detail if it was only one game.

Its difficult to know whether the game is successful or not until at least a few months down the line. It looks like this game was very expensive to make. Yet Sqaure Enix have already started working on part 3, so they must have some knowledge based on pre-orders and first week sales to determine whether part 3 is financially viable.

I think we simply have to wait and see. I expect first week sales to be similar to FF16 sales numbers. Lets wait and see guys, hopefully they make a success of it because I really want this combat system to continue over the style of FF16 and FF15.

Wait til official worldwide number. I bought Rebirth digital because of the twin pack. Remake and ff16 I bought physical. Digitally Rebirth should be higher than remake and Ff16

This comment won't age well. People have been waiting for a top tier Final Fantasy for ages and they finally got it. I think FF7 Remake like sales will be the floor (worldwide) for Rebirth. But counting the Twin Pack, FF7 Remake's sales will increase as well and possibly pass 10 million lifetime when it hits the Switch 2 (and Xbox?). Rebirth's sequel should also boost the sales of both predecessors.

This "trilogy" will not play out like FF13.

Even with a generous 50% digital ratio it's still a low number.

What number are you referring to? We don't have any official worldwide numbers yet, do we? And 50% isn't particularly generous.