Xenoblade Chronicles 3 is reportedly in the works for Nintendo Switch and may be revealed as early as this year.
A new report from Fanbyte, following up on newly surfaced rumors sparked by a trace comment from English Xenoblade Chronicles voice actor Jenna Coleman, claims that Xenoblade Chronicles 3 is not only in development, but is already in the "final stages" of production and approaching release. The report adds that the game was originally meant to be revealed this year, but has been pushed back by a combination of pandemic-related bottlenecks and optimization issues. It estimates that the game could arrive as early as the first half of 2022, though that timeline and other details are subject to change.
According to the report, Xenoblade Chronicles 3 is set long after the events of the second game and features a few returning characters from the franchise, including Coleman's character Melia, hence her apparent knowledge of the sequel. The aforementioned optimization issues are said to be related to the game's technical ambitions, which would see more on-screen characters and enemies than the series' previous entries.
Developer Monolith Soft, which is also contributing to development on Breath of the Wild 2, has yet to confirm another Xenoblade game, but we know the studio has been actively hiring for a related project for some time. The studio's dedicated Xenoblade recruitment page, when run through Google Lens and Google Translate (and my own elementary Japanese knowledge), mentions multiple roles tied to a project in some way succeeding the first three Xenoblade games.
It's possible that the January 2022 release of Pokemon Legends: Arceus, a big new open-world Pokemon game, was one of the factors behind Xenoblade Chronicles 3's reported delay. Monolith and Nintendo have only gotten closer since the release and runaway success of Breath of the Wild, and it's reasonable to assume the publisher would want to space out its stable of big open-world releases. That's just a guess though, and in any case, it sounds like we'll get official word soon enough. Perhaps we'll see it in a fall Nintendo Direct?
The ever-growing list of upcoming Switch games may be due for an update soon. For now, check out the games that are definitely coming out in the next year and change.