So then, with the Final Fantasy VII Remake out, the question has been: when is Final Fantasy XVI coming out? While this question may sound hasty, consider that investors are wondering the same thing. They want to understand the viability of the company, whether or not they’re financially capable of creating another game in Square Enix’s most popular series.
So then, how does it work?
Certain Business Divisions from Square Enix work on these games, one at a time. Even Nomura had to concentrate his efforts fully on first Kingdom Hearts III and then Final Fantasy VII Remake. This means that Business Division 1 works on just one game before working on another.
Final Fantasy main line games seem to be, at the moment, handled by only one Business Division. Kingdom Hearts is handled by another Business Division. That’s why they can work on both Final Fantasy VII Remake and Kingdom Hearts at the same time, with the director switching from between projects. It’s also why Final Fantasy XV and Final Fantasy VII Remake wasn’t worked on at the same time, as they are each Business Division 1.

At first, Final Fantasy VII Remake was outsourced to Cyberconnect, which is another company, while they worked on Final Fantasy XV. When Final Fantasy XV released, they brought the Final Fantasy VII Remake to their in-house studios. They made Luminous its own studio, splitting it from the main studio that makes Final Fantasy games.
The in-house studio responsible for Final Fantasy VII Remake is most likely the one that works on just Final Fantasy games. It is this team, not the whole company, that specifically have their hands full right now with the Final Fantasy VII Remake. And as that is a multi-part series, it may be a long while until we see Final Fantasy XVI.
Something tells me they’re waiting until they see Final Fantasy VII Remake sales before they start worrying about where to take Final Fantasy XVI.