The bad Final Fantasy VII port is entirely Squaresoft's fault. The way this game was coded was a complete mess, especially the depth information on the prerendered backgrounds. Combine that with the fact that most of the data of the programming process wasn't preserved, a proper FFVII PC-port would have costed more time and money than would have been profitable.
Information for backgrounds was saved in a single, encoded file, including the image data in bits and pieces all over the place, the dialogue data, and the depth information bound to the image pieces. If they wanted to port it to the PC, using higher resolution images, they'd had to extract every file, rerender the image, completely re-do the depth information and write an entirely new engine for the game to run these files.
On top of that, with proper coding the game would not have needed to take up more than two discs, and that's only because video encoding wasn't so hot those days.
You could excuse that by saying that this was the first game of its kind, that the project started as N64 game, and that Square just didn't know better. Either way, the way Final Fantasy VII was finished for the PlayStation, a proper PC port was never possible. They just basically put that game into an emulator, wrote "EIDOS" on top of it and sold it as PC game.
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