Maybe their pasts in the KH universe are similar to their stories in FFVII. I'm going to assume that they are both from Olympus Coliseum, seeing as how Zack was, and it was the first place we saw both Cloud and Sephiroth. Maybe they were good friends, but...something happened. Maybe somehow for some reason, the darkness got to Sephiroth, and, similar to FFVII, he went insane, and started...idk, just doing bad things. I'm not going to bother trying to make up an entire story, but just saying that something had happened similar to the FFVII situation.
Even if Zack's hero was Sephiroth in BbS, that still leaves the question of what happened to him, and if that feather really was Sephiroth's. I will still say that there is a significance to the color of the feather. It was jet black, but Sephiroth's are a bright-to-dark blue, tinted with black on the ends (in the art at least. I know they're darker in the game renders, but still not pure black.)
So who knows, maybe there will be more FFVII characters involved later. Haha, wouldn't it be funny if they remade the entire FFVII series in KH?
No. No it wouldn't...
Well Nomura confirmed that Sephiroth was the hero Zack was refering to, and the feather at the end of BBS is blueish black like Sephiroth's I think.
I know it doesn't have much relevance but personaly I think this is what they should have done if Cloud and Sephiroth in BBS:
In last episode if Aqua revisits the coliseum there will be a cutscene where Zack is trying to get his best friend Cloud to come with him to the coliseum to see Sephiroth who has just arrived in the Coliseum. Aqua speaks with Zack and Cloud about who Sephiroth is and Zack explains, "Sephiroth is a great hero who wanders in search of stronger opponents to test his strength against"
In the coliseum Sephiroth ask Zack if he would like to fight him, and Zack is overly excited to do just that. Aqua and Cloud watch from the side lines, of course Zack loses the battle. He is about to stand to thanks Sephiroth for the great match but to his shock Sephiroth continues fighting Zack. Zack questions why Sephiroth is taking the battle so seriously.
Sephiroth explains, "I used the darkness to wander the worlds, seeking strong oppenents to test my strength against. However as I used the darkness more and more it began to corrupt my heart and I obtained a new power, the amazing power of darkness. So I came here, to the coliseum hoping to find a strong oppenent to test my new dark powers against. Now I shall eliminate you as a testimate to my new power."
Zack is horrified by his hero's betrayel. As Sephiroth is about to land the final blow to Zack, Cloud blocks the attack. That's when Sephiroth senses a great darkness in Cloud and manipulates that darkness in Cloud to take control of him (Refrencing Sephiroth's mind control over Cloud in FFVII) He makes Cloud deliver a fatal wound to Zack.
Once Sephiroth releases Cloud from his control, Cloud is horrified, releasing this is his fault. With his last words, Zack tells Cloud not to fall into despair and then gives the last bit of his strength to Cloud before he dies. Enraged, Cloud attacks Sephiroth. Aqua jumps in and this begins an optional fight with Sephiroth where Cloud serves as a party member. At the end of the battle Sephiroth is injured, he tells Cloud that his darkness wil always haunt him. Cloud tells Sephiroth then he will eliminate him and thus erase his dark past (This starts the symbolic relationship of Sephiroth representing the great darkness in Cloud's heart). Sephiroth fades into a corridor of darkness with Cloud following him.
Aqua stands in shock, sadened over Zack's death, she still finds hope in the belief that Cloud will find his light and stop Sephiroth.
Later in the credits Cloud is shown arriving in Radiant Gardens in his search for Sephiroth where he finds young Leon, Arieth and Yuffie. Yuffie rushes upto him, surprising him and causing him to fall to the ground. Arieth walks upto Cloud and helps him up, meanwhile Leon is seen with his arms cross watching Cloud. (Thus explaining how Cloud met Leon, Yuffie, and Arieth and how he got to Radiant Gardens)
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Well there is my idea on how the back story of Sephiroth and Cloud should have been explained lol