You speak of FFT as if it's a bad game. You also say that it was at this point that Square began to "run out of ideas." I don't think Square would be running out of ideas when they push aside the RPG and try something else. Just because Square shows it's best colours in RPGs doesn't mean all other genres they attempt are terrible.

You go on to say FF:TSW wasn't a flop. It was. Didn't make much profit. It did score decent reviews but heaps of people didn't bother to see the movie.

What's next? Oh. You then said that it was obvious that Square was running out of ideas because they started making non-FF games. The examples you gave were Chrono Cross, Kingdom Hearts and Xenogears. I find it funny that you picked probably some of the best Square games ever made to support this argument. Not to mention that the prequel to Chrono Cross, Chrono Trigger, is considered by many to be on par with FF6 and 7, perhaps even better. Also Square has been making non-FF games long before FFVI (which is far back as your timeline seems to go) I especially have many fond memories of Super Mario RPG among other Square old-school greats. This was mentioned before but Kingdom Hearts is anything but a game for children. True, they can enjoy the cute little Disney characters but let's see if my 8 year old cousin can beat Sephiroth. Nup.

Of course, Square has got to die sooner or later. It might be in a few years time. It might be after humans slowly fill up the atmosphere with greenhouse gases and global warming kills us all. Can Square really run out of ideas? I mean, society and peoples views will change over time. Thus Square would have to adapt to the constantly changing environment in both the gaming industry and the world in general to satisfy the needs of the consumer. In other words, if Square gets enough demand for one thing, they'll make it. e.g. People wanted FF to go back to its roots after FF8 because it was a bit...shall we say, "out there." Then Square came back with FF9.