While RPG fans were treated to Xenoblade Chronicles: Definitive Edition, an enhanced remake of the original Nintendo Wii game, last year, there hasn't been an entirely new entry in the Xenoblade Chronicles series since 2017's Xenoblade Chronicles 2. Naturally, fans of the series have wondered when/if a hypothetical Xenoblade Chronicles 3 will be announced. According to one of the first game's voice actors, apparently studio Monolith Soft is, in fact, working on a new entry.
In a YouTube video uploaded back in June, user Din's Meteorite was able to briefly speak with Jenna Coleman, who voices the character of Melia in the first Xenoblade Chronicles and is also well known for her role as Clara Oswald in Doctor Who. He asked her about how she got the role of Melia in the first place and she explains that it was simply through her voice over agent.
However, when she brings up being brought back to reprise the role for Future Connected, the additional epilogue added to Xenoblade Chronicles: Definitive Edition (although she mistakenly refers to it as the second game), she adds that she thinks that another game is being done. She admits afterwards that she's not sure if she's even allowed to say that.
It's important to stress that this can't be taken as an official confirmation that a Xenoblade Chronicles 3 is in development. It's entirely possible that Coleman is simply mistaken or that plans on Monolith Soft's end have changed in the interim.
Even without Coleman's comments, however, the odds of a new Xenoblade Chronicles game do seem extremely likely, given the series' growing popularity and how financially successful it's been for both Monolith and Nintendo. Plus, without spoiling it, the Future Connected epilogue has been stated to be linked to the future of the series. Whether that means the next game will be Xenoblade Chronicles 3 or something else is another question entirely.
Assuming Coleman's information is correct, there's also no guarantee that this means Melia will return for a sequel. So far, each entry in the series has taken place in its own universe and, aside from some connections, are mostly independent of each other in terms of story. That said, Adam Howden, who voices Shulk, the protagonist of the first game, has said he'd happily reprise his role in future games if given the opportunity.
It's possible that a new Xenoblade game could still be a long ways off from being made as Monolith has been really busy supporting development on other games. Not only did it assist with Animal Crossing: New Horizons, it's also contributing to the development for the sequel to The Legend of Zelda: Breath of the Wild, which currently only has a vague release window of 2022.
Xenoblade Chronicles 3 has not been announced at the time of this writing.
Source: Din's Meteorite