That explains it; always did seem fishy that it would be releasing less than 3 years after XCX.

Yeah, this confirms the 2 team setup now publically known about was in place at Monolith some time ago.  Not that I'm complaining, means the time between Monolith releases will be greatly reduced.  

Hopefully this means we'll have XCX2 holiday 2019.

Honestly, I hope their next game is not a Xenoblade game.
I enjoy them, but I'd like to see them try their hand at something a bit different, for the sake of diversity.

For me, it depends. Monolith Soft has actually done a lot of other stuff over the years: Soma Bringer, Baten Kaitos, Disaster Day of Crisis, Project X-Zone, and none of them really compare to Xeno-games in quality, not even Baten Kaitos. They of course have more funding and time these days, than they ever had, but I'd rather they release a game that will be guaranteed to be good than a mediocre game for the sake of diversity (unless there is a vision in the new game.) Plus XBCX2 was left intentionally open-ended story-wise and there is a lot that can be done. 

I think this is true for most first-party development teams. Making new games for the sake of diversity, rather than having a vision of a new and innovative project never really works. I'd rather the idea incite the creation of a new IP than the goal of creating a new IP inciting ideas. 

I see no reason why a new IP by Monolith couldn't be on par with the Xenoblade games in quality. The original Xenoblade was itself a new IP.

Again, it depends on what the motivation behind creating the new IP is. Does Monolith Soft have a vision in their creation of it, or is the game being made merely "for the sake of diversity." The first motivation will likely end up with a good game, the latter won't.

I never said a new IP couldn't be on par with Xenoblade, just that you need to have the proper motivation as a developer. Creating a game for "the sake of diversity" seems silly to me.  

Since XC2 started development about a year before XCX released, is it safe to assume that they started their next project at the beginning of this year?

Maybe a 2nd take on Disaster?

Whew. Sounds like they've had a lot on their plate. The software seems to have been good so far though. I don't see how this game should be different. Hope it's great.