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Monolith showed that they roll with the big guys.  they are making the games Square should have been making.

But,

Monolith publishes on Nintendo Platforms only. Square is multiplatform, so there is not much conflict.

Also, RPGs are only released every few years, so they really do not eat each others sales.

So the answer is No, square should not be worried from a sales perspective, but

They should be worried from an image perspective.  People expect the best from Square and to be outdone by a small game company more than once is humiliating.