The battle at Fort Condor is a mini-game that you can play at Fort Condor at a number of different points in the game. The rewards change each time you successfully complete the mini-game.
There is also one part of the game that requires you to play the mini-game (when recovering the Huge Materia on Disc 2) however you can avoid playing the mini-game at that time and just purposefully lose (in order to battle the mini-boss, CMD. Grand Horn).
The battle at Fort Condor is similar in style to a “tower defense” style game. The objective is to strategically place defensive units to prevent enemies from reaching the top of Fort Condor.
Each defensive unit that you place costs a specific amount of gil. In fact, the man at the top of Fort Condor will not allow you to initiate the game unless you have at least 4,000 gil in your possession (and you will want more than this for sure).
The game is over if CMD. Grand Horn is defeated or if it reaches the top.
Place your Fighters and Attackers as close to the lower limit line as possible and add in a Repairer if you have enough gil on hand. The best strategy is to go all out on the offensive.
Aside from the forced battle on Disc 2, you can actually return to Fort Condor many other times throughout the game and the prizes will be different: