it's called Crisis Core, I think it's out in Japan, but not the US. And you don't get Sephiroth, you play as the Turks -- Reno and Rude.
I think FF7 as well as a lot of other games got more credit than they deserve because they were 3D. FF7 wasn't all that. After you leave Midgar, 80% of the quests were "Hey dumbass, Sephiroth went thataway!" "ZOMG We have to get Sephiroth". That isn't a mindblowing story. Shinra and the Turks were much more interesting, but they were dropped for the most part after the first 5 hours.
The cast of characters were pretty bad.
I don't see what everybody likes Aeris for. She's one of those sickeningly sweet characters that have no thoughts of their own. She existed to be cute, and if Sephy hadn't killed her, I think I'd have wanted to. Josef (FF2j), Tellah (FF4), and General Leo (FF6) were better. They had actual thoughts and opinions, they had a reason for being around.
Barret came off like a Stormfag's wetdream -- a jive-talking dumbass negro stereotype with questionable parenting skills (Hey 4-year old Marlene, watch my bar. I'll be back... someday), poor self-control, and a gun welded to his arm. Way to go Square.
Tifa had no personality, and neither did Cloud. They had a nice little acid trip backstory, but even then, Cloud just never seems to have a personality. He doesn't seem too upset to find out his life is a lie. He's pretty matter-of-fact even after his supposed girlfriend is stabbed through the heart.