Can anyone explain why the S-E/ Mistwalker split occurred and who left?

[Tohoya]

I'm not clear on my history. I know Nobuo and Sakaguchi left, but I don't know who else did, and I don't know why they did it. And can anyone explain why they're going for exclusive development on the 360?

[Zeromus_X]

They have a Nintendo DS game coming up. (If it wasn't released already, I don't keep track of it.) I dunno, because they wanted to? Amano and Toriyama were planned to to designs on some games, if I remember correctly.

More info here: http://en.wikipedia.org/wiki/Mistwalker

[Kawaii Ryûkishi]

There was a lot of dislike for Sakaguchi at Square ever since his personal brainchild, The Spirits Within, singlehandedly crippled the company's financial standing. Therefore, he broke off and started his own studio so he could do his own thing, unhindered by moody chairmen.

It's pretty parallel to the situation with Gunpei Yokoi. He was beloved at Nintendo as the creative mind behind the Directional Pad, the Game & Watch series, Metroid, the Game Boy, and so on. But in 1995, another one of his inventions, the Virtual Boy, completely bombed, and he was held in quite a bit of contempt at Nintendo despite all his past contributions. So he left Nintendo, joined Bandai, and conceived the WonderSwan, which was a fairly competitive product in the pre-GBA portable games market.