We all know how ATB arose. According to the Wikia:

The Active Time Battle (ATB) system was designed by Hiroyuki Ito and was the first battle system to receive a dedicated name. It shares many attributes with the original system but adds the dimension of timing for commands. An ATB gauge tracks when party members are going to act. When the gauge is full, members perform an action. In later games and/or remakes, some actions have an additional wait time, such as casting spells or using special abilities.

As the lore goes, Formula One Racing inspired Ito; depending on their speed, some character’s gauges would fill up faster than others. They would thus receive their, or more turns quicker.

Before, time stopped when selecting characters. Once a player gave each character a command, the battle would resume in real time. The pause in the battle represented the split second between actions. Turn-based battles were just a highly representational form of real-time battles. Of course, intuitively it made sense. In a fight, whoever has the highest Agility or Speed statistic would act first.

But ATB was unique at the time. Not only did it represent a break from the traditional turn-based mechanic, but it also added a new dimension to gaming. Time flowed between actions. All of a sudden, if you hesitated in battle, your characters could suffer great damage. This provided an extra level of urgency. Perhaps you want to take action. You only have a couple seconds before you can execute it without taking damage. The pressure might cause some players to make a mistake. But it was all about learning and a challenge. Due to this, ATB unsurprisingly became THE battle system for Final Fantasy throughout the 90’s.

But while the action of ATB seemed more realistic, its highly-stylized nature emphasized gameplay challenges. Notice with the ATB system, a character can simply remain stuck on an action, and simply take hits. Unless our characters cannot more due to fear, or are defending their friends, they wouldn’t just stand around taking hits.

Once the player does execute a command, they wait. They wait until their gauge, or the gauge of their enemies, fill up. But why not just attack? To date, real battles don’t follow this structure. The rules for engagement are different; most battles abandoned the strategy to march in lines and wait for a command. Yet, unless they’re play-acting, they wouldn’t wait to take turns. Final Fantasy may be a role-playing game, but the characters themselves are doing anything but.

Turn-based is different. Sure, it’s slow and time does not stop in battle. But consider that time stops for our characters as well. That is, the menu represents the split time it takes to choose an action. Once the players select the commands, the battle resumes. Once battle resumes, we can see the immediate effects of our actions. Then, it happens in real time. In ATB, by comparison, time continues, yet our characters remain frozen until the next action.