Namco recently confirmed a story which IGN reported on recently, saying that they will indeed edit a certain scene in the North American release of Xenosaga Episode 1: Der Wille Zur Macht. The scene occurs rather late in the game, and involves Albedo, the white-haired antagonist, and MOMO, the red-haired 12 year old who's also a playable character.
While no one is sure exactly how the scene will be edited, we do know that it's not being taken out altogether, rather, the scene will be edited to make it less gruesome. This editor for one, can say that the original scene in the Japanese version was actually very disturbing, though neither in a sexual nor bloody way.
Xenosaga's ESRB rating will be Teen for blood, gore and violence. To find out exactly how much of each there is in the game, fans have to wait until its late February release. Sooner than that however, you can expect hands-on impressions of the game as well as some new media here at RPGFan in the near future.