Director Tetsuya Nomura said that only core staff are working on the project, and will soon prepare to enter full production, according to Famitsu (via Andriasang).
Voice recording for the project is "gradually" underway, where scenes featuring the four main characters are being filmed together in the same environment for a realistic approach.
Elsewhere, players will be in full control of the game at all times, even during cutscenes, and that visuals have been teased to look like "real photos".
Final Fantasy Versus XIII was announced in 2006 as a companion project to Final Fantasy XIII, which was released last year on Xbox 360 and PlayStation 3.
Updates on Final Fantasy Versus XIII have been sporadic, with Square Enix releasing its first trailer earlier this year.
Final Fantasy XIII will be followed up by direct sequel Final Fantasy XIII-2 early next year, which has been partly inspired by Rockstar's Red Dead Redemption.
Watch Final Fantasy Versus XIII's 2011 trailer below: