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Xiao has had a life full of suffering, leading him to a very lonely state of existence. He is alive, but is he truly living? He spends his days in solitude, disconnected from the world, with his only company being the burden of his karma and the weight of his guilt.
Xiao: Their voices... I can always hear them. Their screams, their cries, demanding more death…
(Profile Voice-Over)
But Xiao does not complain. He has accepted his fate. This is simply the way it is. He paid the price for his naivety and now he pays the price for the millennia of slaughter. He is a weapon of death and he’ll continue fulfilling his duty until he meets his end.
Xiao: Have you ever had a moment where you felt like you were aware of your destiny? The potential of life, the approach of death... whatever it might have been.
Xiao: By now, I have accepted that destiny is the one disaster that the yaksha knows most keenly of all. We are destined to misery... and yet we have no fear. (Perilous Trail)
At least this was what Xiao believed in until the Traveler arrived and the world began to change.
Xiao was able to mentally tolerate the Traveler’s presence because they were a neutral party with no previous history. They were not a friend he might burden, they were not a weak mortal he might endanger and they were not even a being from Teyvat. Xiao became unintentionally attached to them, and by the time he realised it, it was too late. He can’t cut off the connection anymore because the Traveler keeps reaching out to him and Xiao himself has been starving for any form of connection.
Xiao: It's too late. The connection between us is too strong. Even if you wanted to, it's too late to sever it. Hm? You've never thought to sever it?
(Profile Voice-Over)
This bond became an anchor that is slowly bringing Xiao out of his isolation. He has changed since his first appearance: he has become softer and more relaxed, he is more willing to let his guard down and accept advice, even from people other than the Traveler, he is able to recognize faults in his mindset and he is more open to spending time with others and participating in various activities. And above all, he is beginning to connect to his own self.
Although Xiao is not yet at the point of truly understanding the advice he has been given and he is not yet at the point of truly comprehending and addressing his problems, he is always taking steps forward. Slowly, but surely.
Ultimately, Xiao’s arc is about reconnecting to the world and to himself and learning to live. He spent so long observing the world from a distance that it’s time for him to participate in it; there is a place in this world for him, too. He spent so long surviving as a weapon that it’s time for him to learn how to live as a person; someone who deserves love and care like everyone else. He spent so long burdened by guilt that it’s time for him to learn how to let go and put his spear down once in a while, because he has done enough and he doesn’t need to continue serving the world for the rest of his life. His own dreams and desires matter, too.
Xiao: Hah. Suddenly, you sound a lot like Bosacius and the others.
Xiao: They used to talk about how they hoped to live a mortal's life once the world was at peace. I think... I was the only one who didn't think that way. (Perilous Trail)
Xiao: By now, I have accepted that destiny is the one disaster that the yaksha knows most keenly of all. We are destined to misery... and yet we have no fear. (Perilous Trail)
The other yakshas wanted to live a mortals’ life once the war was over. All except for Xiao. But now only Xiao remains. As the sole survivor, he is the only one who can fulfill that dream. It’s a long journey, and he will stumble along the way, but he’ll eventually get there with the help of all the people that care about him. After all the pain and suffering he has endured, the final yaksha will defy the "destiny to misery" and live.
Xiao’s Event Wish “Invitation to Mundane Life” reveals his character arc, but the full meaning is better understood when examining the Chinese version.
In Chinese his Event Wish is called 烟火之邀 which translates to “Invitation of Fireworks”. The fireworks refer to the Lantern Rite, an event with which Xiao is heavily associated. But a more literal translation of 烟火 would be “smoke and fire.” Smoke and fire comes from the phrase 人间烟火 which translates to “worldly affairs” or “human activities” (hence “mundane life”).
Smoke and fire is the hustle and bustle of the human world. The festive celebrations, the music, the dancing, the vibrant and zestful human cities, the sounds and the noise. In Chinese culture, noise is considered a characteristic and a sign of life. When an infant is born, it cries. Life exists where people are gathered together, partaking in activities. Life exists when everything resounds and is vibrant. Noise is life, joy and happiness.
Xiao’s Event Wish is an invitation for him to join the human world as well as an invitation for him to live, to enjoy life and find happiness.
Xiao’s birthday is on the seventeenth of April. In China this is formatted as 4/17. Four (四, sì) sounds like "死" (sǐ), meaning death. One (一, yī) can be a symbol of beginning, unity, or a symbol of the self and of solitude. Seven (七, qī) can be interpreted as “起” (qǐ), meaning to rise or start anew. The character 七 visually could resemble 起 in a stylized or symbolic way.
Thus, having the numbers arranged in this order and using the number-word association and symbolism that is common in Chinese culture, 417 can potentially have the poetic and symbolic interpretation of “From death, I rise” or “To rise from within death”.
This aligns perfectly with Xiao’s character arc. He is marked by death due to his karmic burden and the constant slaughtering in his life. He has been alone for many centuries, living in solitude. Yet he begins to heal and rise again through bonds and connections.