It was the right game at the right time (it was the epitome of cinematic experience in gaming that Sony was pushing hard on PS1 and thus Sony bankrolled a $30M marketing campaign to make it a success in western markets).
Here a copy and paste of a recent post about the same argument:
I think some aren't giving FFVII enough credit.
FFVII was an RPG conceived to expand the potential audience of the genre through a few hooks that were uncommon until that point.
Under this regard the other RPG that had the same mission was Super Mario RPG again by Square.
While the two have a different tone and different hooks it is very clear that Square put the best care possible to design such games to make them more palatable for gamers that were always put off by the more intellectual and low tempo nature of RPGs and that weren't allured by the genre yet.
Super Mario RPG tried to be a saturday morning cartoon with lots of humor and action elements that were novel for the genre (a button dedicated to "jumping" was quite odd for RPG, timed action during the standard commands which would return later in FFVIII).
Final Fantasy VII tried to be a seamless cinematic experience were FMV sequences and in-game sequences blended together (sometime even using real time polygonal models over a FMV as background).
Both have some common traits like the presence of a in-game tutorial to explain the RPG rules to novices (in-game tutorials were quite uncommon for the time and often the info on how to play a game were stuck in the manual or even the official guides), lots of minigames to give the illusion of a bigger breadth of actions compared what was usually assumed for a fairly static genre, shying away from the typical top down perspective for more cinematic vistas, the massive use of latest cutting edge CGI for everything within the game.
These games weren't sold to the masses by the turn based battles or by the statistic driven gameplay, they were sold by the associations with more popular experiences (the action in Super Mario games, the gripping narrative in movies), by the mini games that imitated more widely known genres (usually more action arcade oriented), by the expansive world and long playtime compared the other action games, by the cutting edge graphics and sound and the entertaining stories (be it for the comic relief as the case with SMRPG or the more serious tone of FFVII) and their visual representation.
Looking at the back cover of SMRPG (japanese version) and FFVII (PAL version) and the screenshot they choose to show highlight the above (from top to bottom):
- Widely known "Princess Peach is kidnapped" scene but with richer visuals.
- Chasing Booster mini game which show Mario jumping over a barrel which recall the typical Super Mario sequence of actions but from a new perspective.
- A battle sequence which show the the coolness and fanciness of the spectacle.
- Everything (game screenshots, background) is covered by cutting edge (for the time) CGI graphics.
- Game is like a movie (over 120 minutes of cinematic sequence, movie usually lasted between 90 and 120 minutes hence the association)
- Massive world (hundreds of characters in the world).
- A battle sequence which show the the coolness and fanciness of the spectacle.
- Show mini game section with uncommon action for the genre (explictely "intense arcade action sequences")
- Everything (game screenshots, background) is covered by cutting edge (for the time) CGI graphics.
