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The Neo World Program is a program created by the Future Foundation, designed to place the user in a virtual world by synchronizing directly with the user's brain.
It's built with the most recent psychotherapy technology and administrative software, with input and research of the prominent collaborators: Ultimate Programmer, the Ultimate Neurologist and the Ultimate Therapist, leading other talented individuals.
By mounting a device to the cranium, the program allows its subjects to experience a 'synthetic virtual world'. It can replace memories formed in the real world with information contained in the virtual world. Therefore, it's possible to undo trauma sustained in the real world through the use of the virtual world, which is why the program is also known as Hope Restoration Program.
The device is for psychotherapeutic purposes only and any other use is expressly forbidden, as abusing the device risks the total destruction of the user's personality.
The user of the Neo World Program generates an Avatar, an existence created in the game as a copy of the user's real body. The real body of the user remains in a sleep-like state, as if they're dreaming.
The avatars are constructed from specific memories of the user; thus, their physical appearance and other traits can be very different from what the person is currently like in the real world. For example, the avatars of the Remnants of Despair were constructed by removing their school memories, so they look and act exactly as they did before they entered Hope's Peak Academy. Since they had two or three years of school memories erased, their avatars look notably younger than their real bodies. This is especially evident in Hiyoko Saionji's avatar, as she was reverted back into her younger, child-like appearance.
How the Program Functions
Since the Neo World Program is a next-gen software containing the ultimate reality, it tricks the user's brain into thinking that it's all real as their consciousness is uploaded into the virtual world. Thus, the program's virtual version of Jabberwock Island looks real because the students' brains think it’s real.
According to Monokuma, if you are hypnotized to believe you've been burned, a burn mark will really appear - if the users' brains believe something is real, it's no different than if it actually happened. Sonia Nevermind compared this characteristic to a science experiment she had once heard about:
“In a distant country, there was a certain experiment carried out on one of their prisoners. The prisoner was blindfolded, strapped to a bed, and had small wounds applied to his toes to drain his blood. That prisoner was left alone in the experiment room, as the sound of dripping blood echoed throughout the room. But in fact, his blood was not being drained. He was just forced to listen to the sound of dripping water, but he believed he was bleeding to death. However, in spite of that, the prisoner still died.”
Originally, in the world created by the Neo World Program, a concept like violence never existed and the students were supposed to graduate after gathering the Hope Fragments. However, the virus that invaded the program forced them to kill each other.
If a player's avatar experiences "death" while believing it's real, their brain inside their actual bodies will stop functioning too. Their real body will remain in a comatose state with very little chances of waking up (Nagito Komaeda and Mikan Tsumiki knew they were in a program while "dying", so it is unknown what happens to them). If an avatar that needs to be uploaded has been deleted, there's nothing that the Future Foundation can do.
When activated, the Neo World Program generates one or more Observers to guide the users and carry out the pre-programmed objectives of the session. As non-player characters (NPCs), Observers are not controlled by a person; their existence was created entirely by the program, with their appearance and personality influenced by the thoughts and memories of the users.
Usami and Chiaki Nanami were the original Observers of the Neo World Program, with their roles being usurped by Monokuma during the Remnants of Despair's session. Though they did not technically exist outside of the program, they did have real-world counterparts on which their personalities and appearances were based.
At the end of the program, the users are given the choice to "graduate" or remain in the program. If they choose to graduate, and the Observer determines that the session's objectives were met, they will complete the Hope Restoration Program. Their avatars will be uploaded into their real bodies, forcibly erasing their past selves. Their memories of the program will be gone forever, and the people who have already died will not be able to wake up.
However, if they do not choose Graduate, they'll just have to continue living their tropical life.