Maybe SE should return to making games that made Squaresoft notable to begin with. Games with narratives that started with simple premises but then intertwined into something more complex with an adventure that endeared the player with the cast of characters or world.
Back then there was a lot of classical music influences, and influences from real world myth and legends from around the world.
Today we get Japanese pop rock themes from the characters, the music, and the narrative. Costs to produce games have risen so much due to the fact that they feel pressured to cram ever more realistic cutscenes to artificially induce emotion into the script to make up for the shortfalls in gameplay because they can't adapt quickly to technology.
The first thing Final Fantasy should do is go back to ground zero and begin again with a traditional fantasy setting and then do a lot of thinking in coming up with an endearing plot. The Legend of Zelda is stuck in that period yet still can come up with compelling stories that are quaint even if it misses all that cutscene induced drama.
Then when they have a setting and plot, they can look around to see how guys like CD Projekt are kicking their ass.
Lastly, their management is incompetent. Kingdom Hearts was an incredibly successful series but the last game on a console released in 2005. This is 2011. The excuse for not having one out? Nomura is too busy with other projects.
What a great concept to have in a company. Only 1 guy can handle your major IP's since nobody else is supposedly talented enough so not only is everything riding on his ability, you also had better hope nothing bad happens to him or you're screwed.