Final Fantasy VII LIVE ACTION film?

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That's probably because we have more advanced technology than they did back then. Perhaps they can now better emulate the appearances of the fictional characters.

No doubt but real actors are often distracting in a stylized setting. Animation works better because it's inheirently stylized.

And they did make a Transformers movie, and it sold well. What's the difference?

Transformers was a toy line first, then animated series and movies, with video games as tie-ins. Not quite the same as a direct adaptation of a video game.

It's not impossible to do a live action adaptation of a video game; it's just hard to do it well.

Continuing with voice acting suggestions I think Ron Pearlman would be great for Rude; he's got a wonderfully laconic voice.