sc94597 said:
Honestly, I like the theory that Xenoblade 2 was originally Monolith's 3DS game, and it transitioned to Switch development (being replaced by Xenoblade Chronicles 3D.) That is probably why there was a transition to a cell-shaded art-style, and since art assets are expensive to produce they just stuck with them.
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Possibly, I could really see this as something that started on a handheld.