Perhaps they're thinking of a magic carpet game. That's pretty fantasy-themed, so it would fit with SquareEnix. Although EA would probably want to do it first... who owns the rights to Magic Carpet these days, anyway? EA or Peter Molyneaux?
Personally, since SquareEnix owns Taito, I think SquareEnix should make a Bubble Bobble game in which you have to stand on top of a gigantic bubble, and you could shift your balance on the balance board to roll the bubble toward things you want to crush on the ground, while using the remote to trap airborne and quick-moving enemies. That would be really cool.