Other game companies do not do it and would not do it.
To be fair, this approach is done in Japan, notably by The Legend of Heroes developers at Nihon Falcom.
These games are split because of size, and so, if truly they plan on expanding the game (1:1 scale open-cities/towns and over-world exploration) in quality of the game-play trailer, then I actually don't see any way they could release this as a single without forcing us to wait at the very least 3+ years and forcing us to pay extra for a 2 or 3 blue-ray disk release, which would essentially make little difference from releasing those disks as they finished them instead of forcing us to wait until everyone is done in either case.
@rest of thread :As for those drawing parallels to other games -
Almost no other game, Witcher and Xenoblade included, take place on an entire planet with 10+ city locations, 40+ hours of story spanning those locations.
The Witcher's world is quite small for comparatively to what the world of FFVII is supposed to be (an entire planet), and while Xenoblade offers an entire planet, it's a planet devoid of meaningful content, cities etc. where most of the story is told in the 1 hub-city of the game. Non of those titles are comparable in scope and diversity to what a, content-wise, faithful remake of FFVII would have to be.
FFVII issue is that it is a narrative driven game, and an exploration focused game at the same time. Most games pick one or the other. The Witcher 3 is truly an odd one out there, that tries the same, but it limits itself to a single country or continent.
Xenosaga builds an entire world (in dated graphics at that), and sacrifices tight story-telling in favor of boring MMO type game-play where most of the time is spent running through wilderness killing 10 of X and collecting 20 of Y.
FFVII did the best of both - it gave you the vast world of Xenogears and then put Witcher 3-like narrative driven quests at the center of each new area you explored.
This is the biggest factor in making the PS1 era FF games difficult to remake in high-end graphics. Their format works very poorly with the new design trends, costs, and inflation of the industry.
If you're going to have the best graphics you can have for a system, a huge world filled with diverse locations with unique content, and cut-scene driven, motion-captured, heavily directed cut-scenes drive story at every single location whether it's important for plot-progression, or whether it's just Hojo chillin' at the beach, you're easily looking at a game that will take the same amount of space as the 3 first Uncharted games put together, or the 3 first Assassin's Creed games or the 3 Witcher games.
Could you cram all of these unto one disk? Would you release that project in one package at 3 the price of a regular game down the pipe-line many years after having announced it, or split it up into 3?
More to the point - SE has had FF15 in production for a decade now. That game has yet to produce any revenue what so ever.
If you think SE financial backers will float Kitase and Co the money to just develop a game for 3-5+ years without producing anything to sell in that period, whilst FF15 is still in the works and we don't know how well it will sell, then you have no idea how the industry works.
I really don't want to defend SE on this, but the splitting of this game is not a problem. It's the only logical thing to do to make this remake happen at all (at that level of detail), and it's the only thing that answers the concerns of cut content - which was a concern primarily fueled by time, money, and the format, all of which can be addressed by making it a series instead.
If they truly do plan to make a 1:1 scale remake of that world, and everything in it, that game would literally be bigger than any other AAA RPG to date.
The only games it would perhaps make sense to compare it to would be FF15 or FF14 - the former not being out, and the other being an MMORPG that is being updated and added to constantly.
Again, for people who think serialized JRPGs don't work - look to The Legend of Heroes on PS Vita.
It's been done time and time again, and it's worked time and time again.
If Nihon Falcom can do this, SE should be able to as well.
There's a lot of things to dislike about style of the remake if you're a purist - however, the split format, until we know how and how many, is probably the least worrisome on that list.
(
Before someone call me a blind fan-boy of SE - I don't even like the new direction of the game. Personally I'd like it to be a cell-shaded traditional JRPG keeping true to the original style and game-play of the game, and I'd be perfectly happy to accept lower graphics for that to be realized (even PS2 level graphics).
Personally, the anime style of the original game, the world map, the transitional encounters etc. are more important aspects of this game to me, than the overarching story - so remaking the overarching story and ditching everyone else, alienates me from the game. I'm not particularly happy with the style they chose for the remake - but they chose it. You can't have your cake and eat it too. You can't have FFVII look and play like Advent Children, retain its original content, and still make it unto a single release. You just can't.)