NeoCracker I think you need to read up on the history of the Xeno series. Takahashi was originally with Square when him and his team started work on Xenogears. They had an elaborate overall story which spanded thousands of years. The game of Xenogears was only one part of that story. Square however decided against finishing the rest of the games so the Takahashi could no longer continue the series under Square.


He left Square and created Monolith soft mainly for the direct purpose of finishing his story. He couldn't pick up the story where he left off though because Square still owned the rights to it so he instead had to start the series over with a new (albeit simililar) plot. That new plot ended up being Xenosaga.


Xenogears was indeed the first incarnation of the Xeno story. Like it or not it was a much more complete version than Xenosaga ever was.