I always wondered on what engine the first Xenoblade Chronicles is running. Absolutely massive beautiful landscapes and it runs absolutely smooth even on the 3Ds! No pop ins either!
they made a totally new and optimized engine for those games
The most difficult part of the development was getting the game's scale to work within the new hardware. This entailed the creation of a new graphics engine with a custom visibility culling and complex level of detail systems. All of the environments were rebuilt and optimized for the new system while keeping the original aesthetic intact.