The director and producer of the long-awaited remake give us insight into decision and reasoning, behind splitting the game up into episodes.
The dev team behind the FF VII Remake said that it will be a 'multi-part series' otherwise it would have to cut some parts.
The game director Tetsuya Nomura gave some insight about this in an interview with Dengeki Online, translated by Gematsu. "If we dedicated our time to a single release, parts of it would become summarized. We'd have to cut some parts, and additional parts would come in few, so rather than remake the game as a full volume, we decided to do multiple parts."
The initial news that it would be episodic sent fans into meltdown. Square Enix has clarified why it will episodic and has managed to reassure fans. There are still fans on the fence about this. Hopefully, Square Enix will give more information in the future and reassure everyone else.
Another interview, by Famitsu (also translated by Gematsu), also revealed that CyberConnect2, developers of the .Hack RPG series and more recently the Naruto games, will assist in development of the remake.