Okay so I finished the game last night. I enjoyed the story a lot, though I could have done without that cliffhanger. For those that are satisfied with the ending and don't want a cliffhanger, just don't watch the after-credits scene.
The game picked up at chapter 5 and I do say chapters 5, 6, 8, 9, 11 and 12 were really good. 11 and 12 tying for my favorite chapters.
After the initial ending(pre-credits) I really feel like they are rebooting Xenosaga. That moment when the connections between all the xeno-games clicked was awesome. And to clarify one of the Xenosaga similiarities, You have a primary first-game villain who is just a small part of a grand scheme, with the ending showing the main villain.
Tatsu flat out connects this game to the first game with the things he says, and Xenogears/Saga lore has people leaving earth on these giant arks and earth being 'destroyed', but not really. The Gears/Saga people came from one of the surviving ships that weren't the white whale.