Coming from my own personal experience (which admittedly is lacking in the newer generations), I would definitely say Square and Enix were better apart than they are together.
When FF8 came around, I loved it, but to me that was the true beginning of the end for the Final Fantasy series. Before that the series was always built around a great fantasy setting (with some technology thrown in), with solid RPG gameplay and a Nobuo Uematsu soundtrack. Square knew what worked, and they stuck with it. Even FF7 was an amazing game, even when they threw in new gameplay concepts like the limit break and materia. Like I said, FF8 was great, but it started the trend we have now, where the FF games are thrown into increasingly ornate and abstract (futuristic a lot of the time) worlds, with extremely twisting plots, and a host of characters who all look like girls, and have blond hair (this is more FFX and XII than VIII). I have no problem with any of these things by themselves, but when taken together, they start to degrade the "tried and true" feeling the FF series always had. The reason FF was popular was because it took a proven formula, and kept making small improvements across the board (the job system, active time battle, graphics, etc.). SquareEnix now seems to be more interested in seeing how different they can make their FF games, and I think this is a mistake. There's a reason the rumored FFVII remake is more lusted after than FFXIII--People know the old Square games are gold, but they're not quite as sure what they'll get with the new ones.
As for Enix, I can't honestly say I remember all the games I've played by them, but their RPGs for the SNES were all unique and stellar in their own ways. They went down a path that was a lot less mainstream than Square (Dragon Ques/Warrior notwithstanding), but their games still had a unique feel and polish to them that made them stand out from the crowd. Now that Enix has been thrown in with Square (which has become the Capcom of these past two generations, with all the spinoffs and sequels they've created), their uniqueness is lost.
The last thing I have to offer as proof is this: How can SquareEnix be better off now, if Square no longer has the FATHER of the modern JRPG (Hironobu Sakaguchi)? This man created Final Fantasy, which many consider the Holy Grail of RPG series. The fact that he has a company no longer associated with SquareEnix at all should speak to the fact that they are a completely different company now than they were in the past. And for those of us who loved the past, this isn't a positive thing.
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