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UPDATE 10/02/22: Following yesterday's announcement trailer, Monolith executive director Tetsuya Takahashi has shared a few additional words about Xenoblade Chronicles 3.
Takahashi revealed that the trailer's closing scene showing a broken great sword of Mechonis and the body of the Urayan Titan with a gaping wound was conceived a long time ago. In fact, the seed for this image was initially planted between "the end of development of Xenoblade Chronicles and the beginning of development of Xenoblade Chronicles 2".