If FFXVI is a decline for the series(Which is something I also think it will happen), then a sales decline in the JP market would be felt even further. FF XV and VIIR were > 1 million sales in Japan alone. Could a decline to, let's say, 800-600k be offset with overseas sales? I really don't know what to expect from XVI. Maybe, if the title truly is good and Yoshi P delivers, the WoM will let it have better legs.
I think Square shouldn't worry about FFXVI performance in Western markets. The franchise is still pretty popular (especially thanks to its legacy) and the release of mainline FF entries is still treated as an event by Square and hardware manufacturers. Marketing push will be big and if quality is there FFXVI shouldn't have issues in performing as well as the previous entry. In Japan, though, I think the ceiling is the same as FFXV.