I'll preface by stating that I believe Xenogears to be a FAR superior game to the Xenosaga games. However, through much mental trudging, I've come to the conclusion that -saga could, in fact, be easily tied into the Xenogears storyline. --Spoiler warning!--
At the end of Xenosaga Ep. III, a syzygy occurs with the dimensional shift of U-DO/Abel, Nephilim (Mary's Will)/Animus, chaos (Yeshua)/Anima, and the remainder of Zarathustra. Though we're never quite told how and when Lost Jerusalem is rediscovered, it COULD logically follow that the Zohar, anima relics, and wave existence are injected into the Xenogears timeline long before the events of the actual game. What would remain in this conundrum would be Shion's actual discovery of Lost Jerusalem in the Xenosaga timeline. Since Shion is referred to as the "key," perhaps her return to Lost Jerusalem would re-trigger the same dimensional shift occurring at the end of Ep. III and allow the syzygy to complete. Thus, such a shift could inject Shion's will into Nephilim, and in turn create Mother Sophia/Elhaym while forcing Mary's will out of Nephilim and creating Miang (who exists as the physical form of Animus). Similarly, the fusion of U-DO, Abel, and chaos (or simply the transfer of U-DO) could explain the origin of the Wave Existence. The power of Anima would once again be divided into the Anima Relics. Chaos' physical form (sans Anima power) could have several manifestations. Theoretically, chaos could partially make up one of Fei's multiple personalities (likely the "coward" or the unnamed). What could account for all of these changes is Zarathustra, as it constructs new phenomena by piecing together parts of existing phenomena. The dilemma here would be where each part of the aforementioned syzygy would manifest itself in the Xenogears timeline. That's what "Perfect Works" could help explain. Xenosaga was one helluva difficult story to follow, but it could serve as the foundation for key parts of Xenogears. While obviously not a direct prequel, the two storylines seem to share much more in common than people realize. OK, flame doors open and feel free to critique :-)

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