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I don't see why it should, None of the characters are going to be in this game that was in the original Xenoblade, as well as the villains (won't spoil for those who haven't played the first game) obviously won't be the antagonists in this. They're really two completely seperate things. Psyched that it's in the same universe though. 

 

PS: The amount of character customization depth in this for those who seen the clubhouse puts the original Xenoblade to shame. This game has got me VERY hyped. Also, sad to see so much crap getting thrown at the character design, it's Soraya Saga's through and through and I have absolutely no problem with it. It veers a little more towards anime instead of realistic, is that what's the problem? Also, graphics downgrade? 

http://youtu.be/RwgVanoq_a4

I don't see a graphics downgrade at all.