I'm going to drop this theory here and expand on it when I have more time / more evidence becomes available. This is something I've been working on for some time and there's a lot of speculative evidence for this happening. Some of you may remember my video correctly predicting the incapacitation of Xiao before Episode 6 began so this isn't anything unusual from me. I'm just a series lore buff and love making connections from the bread crumbs Sega has left us over time. I also freely admit I'm not always right, such as Mitra actually having normal human ears rather than Newman ears. (I'm more confused by the shape of their headdress now because of that.) Large Episode 4-6 spoilers below
The Shiva/Oracle war IS the war spoken of in End of the Millenium's opening. It will lead to the creation of Algol to seal Shiva away.
Points working to support this theory
- The Akashic Record is a record of not just only the past but also the future and Omega was a dream where certain facts may have been confused.
- The presence of Lashiec.
- One ARKS does not have enough power to defeat Shiva as seen in our attempt to defeat her in the form of our other self. They likely will only be able to repeat what the Photoners did, but on a grander scale of 3 planets than 1 planet. (Remember Rykross was intended to be an early warning system for the weakening of the seal every 1000 years, not part of the seal itself.)
- The Profound Darkness found in The Edge appears female in their final form.
- There's a time loop once Phantasy Star III takes place which splits the timeline, sometimes with the Alisa III ending up near Earth, possibly after the ARKS arrive. (We'll never know this for certain, the Earth adventure was supposed to span 3 episodes but because Hitsugi's VO had to leave that was put on hold. Regardless this triggers the "Earthmen" portion of the timeline) In other cases it arrives near Ragol and the seal of Mutt Ditz Poumn is placed to contain the Dark Falz within. (The ruins are actually inside of a space ship as seen if you noclip through the area with a map viewer.) Somehow both scenarios are able to exist at the same time. However Ragol doesn't translate directly to PSO2 because it wasn't Pioneer 2 that found Xion. There's a chance it was a ship from Coral that found Xion due to the shape of the ships of the Oracle fleet. We also have the name of that ship, Pioneer 3. Pagini name dropped that as one of his random statements after a trade in PSO Episode II. Pioneer 3 never arrived at Ragol.
- The Dark Falz "Aru" entity that attacked early on in Episode 4 used an attack that was eerily similar to the Black Wave.
- Sega refuses to provide details on Episode 7 at this time with Vita support ending, instead opting to simply say the game will get a gigantic update. This could be something on the lines of what an MMO have in a named expansion. We also know there was a job posting for PSO3 some time back.
- The Vita opening highlighted a Musk Cat for the 25th anniversary, not a Rappy which had since become the mascot of the series.
- Lillipans could evolve to be Motavians, perhaps by staying permanently in Barbillipan form. Draconians could evolve to become Dezorians.
- Chapter 4 mentions efforts to reseal Shiva.
Other possible connections
- Characters like Re Faze may be Phantom Class ARKS that held a technique a bit too long and got stuck like that.
- Several Luminmechs look similar to Dark creatures found on Ragol. The new enemy at the end of Divide Quests looks like a Chaos Sorcerer. Prior to this there was another that looked like a Merlan/Arlan.
- Nyau may be a great grandchild of Myau that ascended to an interdimensional being. Phantasy Star End of the Millenium provides evidence of Musk Cat evolution as one of Myau's litter was able to open a bottle whereas Myau couldn't. Nyau carries a bottle of Ashline around their neck.
- We know Gurhal is NOT part of the Oracle universe as per a sub-story that took place when Emelia and Vivienne arrived via a trip through subspace.
- The Etoile class is unique in that players using that class and damage balancer are unable to heal via self heals from weapons, regeneration or techniques, and instead can only heal via the Etoile's abilities and mates. This is very similar to how Androids in Algol operate in that they can't be hit by techniques for healing and instead have to rely on Repair Kits. (For the sake of gameplay Sega probably made a decision to allow healing via mates by all charactesr rather than requiring repair kits be used by casts.)
Things that may disprove this theory
- Idola Phantasy Star Saga features the presence of several prominent PSO2 figures such as Seraphy, Quna, Luther, and Matoi
- Varuna (Lashiec) and Mitra are based on deities mentioned in the Indian Vedic Sanskrit hymns. We've seen other names from there mentioned before such as Agni and Indra, as seen in the weaponry on Ragol.
- Shiva changes the mothership to look similar to the Ruins on Ragol.
- Episode 6 is subtitled Stars which refers to the Soul.
- A Gunslash successor/scion is on the way this summer and it wouldn't make sense for Sega to put development into it if the game was about to end in such a definitive way. (Unless Algol gets created but the ARKS leave the area after.)