The Pathos-2 facility's original purpose was relatively mundane - possibly marine observation or deep-sea oil drilling. The weird consciousness-related experiments only began as a response to the asteroid strike, and solely on the crew's initiative. This explains Pathos-2's industrial design and the dubious morality of the experiments.
Eleven months after the surface of the earth was destroyed by [an] asteroid strike, scientists in the sub-sea facility Pathos 2, struggle to remain sane, alive, and human in an increasingly threatening environment.
Due to its location, the facility was fortuitously spared, but the crew of Pathos-2 had to fend for themselves. With supplies dwindling and the situation deteriorating, they began to consider unconventional strategies for ensuring humanity's survival.
The only way out is to do something unimaginable.
In addition to its natural protection from the asteroid strike, the facility had several advantages: it was massive, manned by scientists, equipped with cutting-edge technology (e.g. WAU, robots, blackbox implants, and structure gel), and designed to be somewhat self-sufficient (buying the crew some time).
Catherine Chun: "No, no! I'm so close! Strohmeier's going to shut down the Ark Project. It's not my fault people keep killing themselves!"
Supervised by WAU, the Ark Project was designed to preserve the last remaining human beings until surface conditions improved, à la Noah's Ark. It explored the possibility of transferring consciousness to a machine. "Mockingbird", for example, was an attempt to preserve the mind of Adam Golaski.
Sarang was rushed to the infirmary, but declared dead shortly thereafter. Dr Chun, the only other person present during the death, has been detained on suspicion of manslaughter... Witnesses report that Sarang has been arguing for suicide as a “way out”. Many confirm that there was a certain logic to his reasoning...
Isolation, malfunctioning equipment, and accidental deaths (e.g. Reed's) significantly weakened morale. Encouraged by Dr. Chun's progress, Sarang believed that his death would be "temporary", and even converted others to his viewpoint. This led to a string of suicides, prompting Strohmeier to shut down the project.
Peter Strasky: "You know that structure gel leakage? That's going to be a problem. In fact, it is a problem... Look, this is the short version. WAU has gone rogue."
WAU had always been doing things on its own; Vivarium and Mockingbird were its creations. As manpower decreased and environments became less hospitable, the crew relinquished more control to WAU. Structure gel (consisting of nanobots) allowed WAU to repair damage to the facility, but also gave it a formidable ability to redesign and reprogram. When Strohmeier tried to shut down the Ark Project, WAU reacted defensively.
Machines are taking on human traits and alien constructions have started to interfere with routine. The world around them is turning into a nightmare.
Long story short: when you combine isolation, nanobots, brain implants, experiments involving consciousness, and a super-intelligent rogue AI, bad things happen. WAU gained full control of the facility and the Ark Project. Among other things, it continued to tweak the simulations and evaluate their stability.
Simon: "I'm here! Can you hear me?"
Fast-forward to the start of the game itself. Simon is a simulation whose mental stability is being tested. Hence his confusion, his ability to breathe underwater, and the visual artifacts seen in gameplay videos. Simon's environment is the one that WAU finds easiest to simulate - namely, its own surroundings. WAU has mapped Pathos-2 and the ocean floor so completely that it is able to recreate them.
Catherine Chun: "Looks like you're stranded at Upsilon. It's a power and manufacturing plant. It's been offline for years. How did you get there?"
Dr. Chun led the Ark Project, and her voice also guides the player. This is not a coincidence; she interacted with the simulations by speaking to them directly. Her eerily nonchalant tone, however, suggests that she is now being impersonated by WAU.
Catherine Chun: "Come inside, but stay clear of the Jiangshi."
The Jiangshi and other entities could be viruses, simulated minds gone wrong, or antagonists that have been created by WAU for testing purposes. Getting caught by a Jiangshi merely triggers the construction of a new simulation, so death is not final.
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Note that WAU's motivation (the survival of Pathos-2's crew) is unselfish, though its methods are sinister. This separates it from HAL 9000, who was primarily motivated by fear of disconnection. As for the meaning of SOMA, I like Macgyverthehero's suggestion that it references immortality through digital uploading.
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