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The difference is that the characters actually matched the style and texturing of the world in Xenoblade Chronicles. They don't in this. The type of texturing and lighting used in XCX is much closer to realistic. Realistic characters with skin instead of plastic would've looked better in this game.
In XC, the actual world is much more stylized with very bold colour choices and much higher contrast than in a realistic environment. You could never convince someone that the world of Xenoblade Chronicles was a real place. Whereas some of the parts of the city in XCX, do look very photo-realistic.