I think the connection is that SE is terrible and incompetent at developing HD titles at their internal Japanese studios (save for a few exceptions) whereas a smaller team with fewer resources (Monolith) was able to produce an impressive-looking open world RPG in a reasonable time period.
I don't think they are terrible or incompetent, they are just in a transitional phase. As I said before, Squaresoft already started having problems with PS2 era development. Their development methods weren't efficient enough for the level of audiovisual quality they were aiming for. They didn't really do anything about it during the PS2 generation as they KIND OF still managed to get by (though, as the long & problematic development of FFXII proves, it wasn't without its casualties). That came to bite them in the ass during this generation, as they finally noticed things need to change (so they started to develop the White Engine) but they were a bit too late for it (they should've had the tools done when they announced the games in 2006 instead of two years after), especially since they moved to multiplatform development for one of their biggest franchises.
So... they've been learning (through some failing) how to do things better. I'm simply positive we'll start to see the kind of quality in their home console games as we are seeing in their handheld games. If they can achieve something even half as interesting & good looking as Agni's Philosophy + make it closer to FFXII (but seamless, of course) than X or XIII, then that has the potential to be a very special JRPG (as long as Toriyama is kept away from it).
As for the development cycle, everything you're describing to me shows a company that truly does not have its shit together.
They didn't have their shit together for a couple of years from 2006 to 2008 and then they put a moron to direct XIV. My point is that they are getting their shit BACK together. That simply doesn't happen in a day for a company the size of Square Enix and all the damage has already been caused, so they can't really NOT fix XIV ASAP. And to do so, unfortunately, means that they have to put some project on backburner.
I don't know how anyone can see how this company has been the past generation and feel anything but disappointment and have reservations about Versus.
Because I see nothing in Versus XIII's development that hampered XIII & XIV's and caused them to be what they are. XIV had a really incompetent director who shouldn't have been directing an MMO, whereas Nomura has a proven (though not spotless) track record and has shown to be a person who keeps learning & doing his job better. XIII suffered from a lack of direction for the longest time, Nomura is a competent director so while there have been some different iterations of certain aspects of the game, it hasn't had similar identity crisis as XIII. Most importantly, Versus XIII isn't being rushed out. Both XIII & the original XIV were more or less rushed out, despite being seemingly long under development.
Or why Versus XIII would ever be considered that difficult to create.
FFXII's development itself was a hugely problematic & long ordeal. Versus is on a much more powerful console, so it takes more effort to do even something that is like FFXII, let alone something like Versus that is even bigger & more ambitious.
