- "The first Matrix I designed was quite naturally perfect, it was a work of art, flawless, sublime; a triumph equaled only by its monumental failure. The inevitability of its doom is apparent to me now as a consequence of the imperfection inherent in every human being. Thus I redesigned it, based on your history, to more accurately reflect the varying grotesqueries of your nature. However, I was again frustrated by failure. "
- ―The Architect [src]
The Nightmare Matrix was the second prototype Matrix, designed by The Architect after the massive failure of the Paradise Matrix in the hope that human minds would more readily accept an imperfect world with suffering. Unlike the first version, this Matrix instituted a basic cause-and-effect programming and forcibly made those connected to it accept the program.
It also featured programs that resembled mythical evil creatures in various human mythologies such as vampires, werewolves, zombies, aliens, etc. It also failed, but many of the programs who were designed for it survived deletion in exile.
The Merovingian and his wife, Persephone may have had their roots in this version of the Matrix. Upon its failure, the Merovingian started a smuggling ring of programs and information to provide a haven for exiles that would last for 6 cycles in the final version of the Matrix.
The Nightmare Matrix is also featured in the Matrix Online.