It's happening and I'm fine with that based on this interview where they talk about the game having just as much content as the original:
Quote:
-they made multi-release since they would have to cut stuff out if they made it in one game. The detail of the game will be so dense, and you will be able to go to various locations within Midgar that you couldn't go before.
-there will be some stuff that has to be cut, but there will be lots of stuff added. overall volume will be big
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Quote:
A rough translation of http://dengekionline.com/elem/000/001/173/1173362/
- About the details of splitting the game into episodes, please tell us more.
Kitase: From the beginning, we have considered it impossible to remake FF7 into one single game. Althought it's impossible to tell you the details about the splitting at the moment, please wait for our further announcement.
Nomura: If we tried to stuff the whole game into one release, some part of the game would have to appear as digests. We'd have to remove some contents from the game, and it would be difficult to add more to the game. Considering that a full remake of the original game must be achived, we have decided to split the game into episodes.
Kitase: Taking the No.8 street shown in the video this time, even just this is already highly dense. If we are to remake the content of the original version at that quality, it would have been impossible to do with a single release.
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If they split it into three parts, we'd be looking at 3 30 hour episodes each based on the original content and that's ignoring all the side shit to do. This way, we'll actually get to play it before 2020 as well.