Philosophy and Hyperreality
The concept of the City in The Matrix and its sequels is an archetype of the hyperreality theory proposed by Jean Baudrillard and developed by Umberto Eco; that is that the virtual "city" constructed by the machines controlling the society is more convincing and realistic to its inhabitants than the "real world" – a dystopian futur noir portrayed in stark contrast to the virtual one.
The harsh, gray, uninteresting landscape was implemented to make sure the unknowing inhabitants of the Matrix did not question their living space, lacking an alternative. It is possible that the City is an inhabitant-unique environment, in which no one sees things the same way. The visualization of the City as gray and unnatural in The Matrix could possibly be a result of the redpills' experience outside of the Matrix. Further, Agent Smith describes to a captured Morpheus that earlier instances of the Matrix which were cheerier did not meet the (subconscious) expectations of the humans hosted within.
Read more about this topic: Mega City (The Matrix)
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