The .bin file is not editable in a text editor, the .cue is. Looks like the .cue is valid, check if the filename of the .bin is _exactly Final Fantasy VII [NTSC-U] [Disc1of3] [SCUS-94163].BIN. Remember that Linux is case sensitive so Final Fantasy VII [NTSC-U] [Disc1of3] [SCUS-94163].bin is not the same as Final Fantasy VII [NTSC-U] [Disc1of3] [SCUS-94163].BIN. If it's not a name mismatch, then try posting the whole log file (with verbose logging turned on) on pastebin.com to take a look.

@mitu I checked out those points you recommended and they all seem fine. Im going to seem like total idiot now.. Everything else was fine but I just had to update the retropie setup. Then I updated the emulator again. I updated everything not too long time ago so I had no idea it could be that. I even uninstalled and re-installed the psx emulator and updated it before doing this. Now im wiser and can potentially help some other people in the future. I really appreciate your help, it pushed me to right direction.

@mitu Of cours, but then you mess up your rom set. On the other hand some systems or naming conventions use rom sets which have names which are not unique. (I don't find one at the moment, but i saw such discs) e.g. "<Game>.cue" "Track1.bin" "Track2.bin"

If you don't want to change your .cue file, you may test this option: https://retropie.org.uk/forum/topic/22013/redirect-solution-for-cue-bin-problem

@a12c4 My suggestion was for the situation you described where you have a .cue and an .img, it's clear that the .img functions as a .bin file. Give it a try and see if it works. For other things, you could get away without a .cue file, but I don't think it will work for the situation you described - .bin containing both data and audio data. A .bin without a .cue means - for me - that there is only a data track on the disc image file, in which case you can rename it to either .iso or .img and don't generate a .cue. If the .bin/.img/.iso contains something else besides 1 data track, then the emulator would not be able to separate or read the separate audio/video/whatever info because it would not know where to look them up.

@quicksilver Yeah, I did the same. Took those that were already converted, the rest I went for bin/cue formats. Converting myself never went right. Thanks for the guide! I'll give it a try later. So far I'm only interested in PCE-CD and Sega CD games.

@singsonn the path in the cue sheet isnt started with something like "c:/../.../gamename.bin"? You have to remove all that info if it does. I had to fix tons of pcengine and sega cd games because of this. This might not be your problem but i havent seen your cue sheet.