Could be revealed soon.
In a recent interview actress Jenna Coleman, who voiced Melia in the first Xenoblade Chronicles, and is known for her portrayal as Clara Oswald on Doctor Who, had something quite interesting to say:
“God, when was the first game? Ten years ago? It was a long time ago, I did it pre-Doctor Who days and when they did they second one , they asked me to come back. And I think they’re going to do another.”
“Common knowledge? Don’t know. Yeah, I think they’re going to do another. Not sure if I’m allowed to say that.”
The next installment of the Xenoblade Chronicles series is said to be a sequel to Xenoblade Chronicles 2, taking place in distant future.
According to sources Xenoblade Chronicles 3 was set to release this year, but this was leaked back due to the pandemic asking other things. A release early next year now seems most likely.