The news makes its way to us from a recent Mobius Final Fantasy live stream, in which project lead Naoki Hamaguchi revealed that Square Enix has shifted its focus away from working with an external studio on the game. CyberConnect2 was previously helping Square Enix with development.
Hamaguchi confirmed that, while "development was moving forward with external cooperation," Square Enix "has decided to shift to an internal setup, including mass production and quality, because we want to control everything, including quality, on a stable schedule." So while CyberConnect2 will still be helping out with the project, the remake of FFVII will be mostly an internal operation moving forward.
This makes a lot of sense considering the recent announcement that Square Enix was looking for new talent to join the development team. Producer Yoshinori Kitase said in his recruitment message that the team is striving "to surpass the original work in terms of quality" by increasing the number of staff to help strengthen core company development on the project. And when you consider their latest financial results, well, it's clear they want to release this game at its best, much like they did with Final Fantasy XV. The wildly successful – if rather late – entry in their flagship franchise proved to be the right game at the right time and that success has no doubt made Square a bit protective over similarly long-awaited titles.
Given this information, it makes a bit more sense that both the Final Fantasy VII remake and Kingdom Hearts III will be held off for release within the next three years or so, given they share a notoriously perfectionist game director. So while we may hit year 2020 before seeing either game, feel free to console yourself with these screenshots of both projects shared earlier this year.