IGN Presents: The History of Final Fantasy VII
The floor caved in when Nintendo announced their freshly re-dubbed N64 would be cartridge-based, not CD-ROM.
Nintendo’s about-face left Square hanging. Their passion project simply would not fit onto a cartridge, and Sakaguchi refused to diminish it. He and Kitase both had long experience chopping game elements to fit Nintendo hardware limitations, but this time they just couldn’t do it. They took their epic to Sony instead.
As far as Nintendo saw it, that betrayal made Square the enemy. Nintendo president Hiroshi Yamauchi publicly vowed Final Fantasy would never appear on a Nintendo console again. Each company dumped the other’s stock, burning off all financial ties and severing every connection.