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I still have a certain resentment towards Square all stemming from that time. I haven't forgiven them and Cloud's inclusion in Smash Bros. p1$$ed me off no end. They've done very little for Nintendo home consoles since that time and only really got mediocre Final Fantasy spin-offs.
This is the exact broken thinking that "N" has, as well as it's fans. The reason Sqaure left them at the time was 110% on "N". The industry was moving forward, and carts where very expensive, and hard to produce in a timely manner.
Square, like most in the industry at the time wanted to make the best games they could, and that meant using CD's. As per the norm, "N" knew best, and said this isn't the future, and carts are better. Square along with most long term 3rd parties went where their visions could be realized.
Sony allowed them to do that, when "N" did not. Honestly speaking, I found FF7 to be a turd along side their past works that where 4, 5, and 6 on the SNES(but that is my opinion). So at the time, I didn't miss them at all, but in regards to the industry as a whole, it was a HUGE turning point. As it showed what was possible in games.
"N" sat their like spoiled children mad that no one wanted to follow them in to the rabbit hole of staying in the stone ages and not moving forward. Like I have said in the past, when it comes to "N" it is their way or the highway. If you don't agree with them, to bad. Well, guess what? You reap what you sow!
EDIT: If you want to be mad at someone, "N" should be who your mad at, as it was them who caused the issues with Square.