Sephiroth's costumes in Super Smash Bros. Ultimate have been revealed and they reference the Weapon monsters from Final Fantasy 7.
In the world of Final Fantasy 7, the planet is a sentient entity and it can respond to global threats. When Jenova first crash-landed on the planet, it created a group of Godzilla-sized behemoths to deal with her. The Cetra dealt with Jenova before these monsters were needed, so they were put to sleep. The Shinra Corporation discovered these slumbering monsters and referred to them as "Weapons". The Weapons awoke when Sephiroth used the Black Materia to call down Meteor, but Sephiroth hid away in the North Crater, leaving Cloud and the Shinra to deal with them. The Shinra blow up Sapphire Weapon and Diamond Weapon, while the remaining three (Emerald, Ruby, and Ultimate) are all optional bosses.
It was recently announced that Sephiroth is coming to Super Smash Bros. Ultimate as a DLC character. Like the other characters in the game, Sephiroth will have eight different looks. It was pointed out by Ozyroth on Twitter that the choice of costumes seems to be a reference to the Weapon monsters.
Sephiroth has his basic black costume and two shirtless variants. His remaining five color alternates are blue (for Sapphire Weapon), white (for Diamond Weapon), purple (for Ultimate Weapon), green (for Emerald Weapon), and red (for Ruby Weapon). There were actually two more Weapon monsters that existed in other pieces of Final Fantasy 7 spin-off media. Before Crisis had Jade Weapon, while Dirge of Cerberus had Omega Weapon. Neither of these are referenced in Final Fantasy 7, so they're not likely to be referenced in Super Smash Bros. Ultimate.
The Weapon monsters in Final Fantasy 7 gained a reputation for being some of the most fearsome video game bosses of their era, to the point where they might be the most famous post-game enemies of all time. We've yet to see the Weapon monsters appear in the Remake series, but they will almost certainly return to haunt Cloud and his friends in the future, and we can't wait to see them reborn on modern systems. In the meantime, we'll have to be satisfied with subtle references to these iconic beasts, and maybe a Spirit battle or two. A giant Bowser & Incineroar combo could be the Emerald & Ruby Weapon of Super Smash Bros. Ultimate in the future.