Why was Sephiroth in the movie? Two words: fan service.

But yeah, I wouldn't be at all surprised if they make more sequels and try and milk the FF7 fanbase for all its worth. Although, I think it's the FF13 compilation that's supposed to last 10 years. Which is pretty arrogant when they don't even know how the first one's going to be received yet, but that's another rant entirely...