Everything looks correct. The only possible problem I can see is your install directory. I always move my games out of the steam folder by preference because I'm so used to the 'C:\Program Files (x86)\GameName' convention, so try dragging and dropping your game to 'C:\Program Files (x86)\Final Fantasy VIII' and see if that changes anything. If that doesn't work, the only other thing I can think of is reinstalling Microsoft Visual C++ 2010 x86 Redistributable, which you can find on the net.