People have been begging for this since the PS3 deput... Maybe there was weight to the rumors?? http://www.siliconera.com/2010/03/22/square-enix-ceo-comments-on-final-fantasy-vii-remake/ The article also mentioned making it a PSP game (biiiig mistake imo). They should just make it an XBLA and PSN game.
SCEA does own the exclusive rights to the FFVII characters, so a remake of VII would never see the light of day on anything but a sony console. I think that's why they mentioned the psp, because it's the only other alternative.
