The question of whether Xenoblade will sell well in the west has been cropping up a lot since it was announced for an April 2012 release. Personally, I think it'll do just fine. Take a look at sales figures for recent JRPGs. The numbers below are all from VGChartz, which I believe to be accurate.
Japan - 1,054,200
US - 454,925
Europe - 305,480
Keep in mind with this one, Monster Hunter is one of the biggest properties in the Japanese market, while being relatively unheard of in the west. This is a fringe case, where the Japanese market outsold both the US and Europe combined; even so, the 750,000+ units sold worldwide more than make up for translation and localization costs, thus turning a profit. To not publish this game outside of Japan would have been a very clear mistake. Let's continue with some other titles.
Japan - 114,074
US - 240,918
Europe - 87,167
This is the second-highest selling JRPG on the Wii, according to VGChartz's search sorted by popularity. When sorted by total sales (worldwide), it comes in fourth, beneath a Pokemon game (and, come on, of course that sold gangbusters) and a Dragon Quest game.
This is where we start to see the trend for most lesser-known JRPG titles. Not only does the US market outsell the Japanese market, it even beats out both other regions combined. Go ahead and look at some other small-name releases out there, like Rune Factory: Frontier or Fragile Dreams: Farewell Ruins of the Moon.
On the total sales side of things, next up is Tales of Symphonia: Dawn of the New World.
Japan - 239,801
US - 175,143
Europe - 126
This is, again, kind of a big-name title in Japan, so it's not surprising to see it sell well in the Japanese market. It's also anime disguised as a JRPG, so it's not surprising to see it do poorly elsewhere. This does, however, continue to show another trend worth noting; JRPGs do very, very poorly in Europe.
Even so, a wide North American release selling more than 70% of the units sold in Japan is pretty good. I'd be willing to bet that covered the costs of localization and then some.
Oh, and those Pokemon numbers I mentioned earlier?
Japan - 303,646
US - 696,462
Europe - 292,220
Once again, this shows the same market trends as before; European sales being poor (in comparison to other markets), the US dominating the market when it wants to, and the Japanese market not caring about anything that isn't Monster Hunter.
Honestly, I'm just surprised it took Nintendo this long to announce Xenoblade for North American release. They must know these numbers, which means someone has to have noticed the same things I'm pointing out. The fact that it was translated and localized for the English language at all means that Nintendo would have been foolhardy to not bring it over State-side, given that a European-only release could very easily be a waste of money.
With proper marketing and a quality product, and we know that Xenoblade is the latter from European and Japanese publications' reviews, the North American market is pretty easy to sell to. My only worry is that it won't sell well because of poor marketing and, let's be honest, a less-than-ideal release window, and then someone's going to point at that and say, "WELL, GUESS WE SHOULDN'T BRING OVER THESE OTHER WELL-RECEIVED RPGs, EITHER!"
Those're my thoughts on it, anyway. I'm curious to hear other peoples' thoughts on this.