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The reason Squeenix is such a joke these days is because their storytelling has not improved since FF6. They have these vast resources to bring to bear on the PS2, the PS3. There's essentially no limits on dialogue, no Nintendo forcing them to water down their plots for a children's audience. Full access to voice acting, a giant CG farm to render whatever scenery they want. The sky is the limit.
And what do we get? The same old shit they were doing back on the early consoles. It's the same console RPG template over and over again, just with new costumes and different backdrops. Same cliches, the same straightforward kill the bad guy, save the world plot in every game. Emotional conflict has easy resolutions, and all the problems in the world can be solved by finding the right evil bishonen and beating the tar out of him. They substitute complexity for depth, and blind you with pretty FMVs and summon effects so you don't notice the difference.
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I agree with this, and I'd make the argument that Square has never really grown into the technology that have. FFX was pretty well liked, but the big problem people had with it, aside from Tidus looking like Meg Ryan if she got dressed in the dark, was too much dialog and too many cutscenes. "If I wanted to watch a movie, I woulda rented LOTR", etc. It was a little too tedious overall. Then in FFXII, they cut the script in half, integrate a lot of movies into gameplay, and people complain that the narrative was weak and undeveloped. It seems like they're trying to both please everyone and stay within their corporate frame of "what do kids find hip today?" and shoehorn it in whenever possible.
There's gotta be a middle ground somewhere that Square can get a foothold on and make a good RPG that's a good mix of new technology and classic storytelling. XIII does look kinda cool, but to be honest, I'm not really getting an FF vibe off of it yet - which may actually be a good thing considering how split the fanbase has been since Wada and Nomura took the reigns. Kind of like FFVIII I guess, not like anything before it, really.
Jam it back in, in the dark.