Absolutely everything we know about Outlast 2's story, explained
Just a warning: we're about to do an explanation of all the key elements involved with Outlast 2's story in order to clear up as much as possible. Massive Outlast 2 spoilers ahead.
So you just finished Outlast 2. You've sprinted past enemies both terrifying and frustrating, and have become the happy father to a baby that's either the Antichrist, a Murkoff experiment, or maybe completely nonexistent. The question of the hour is, what the hell just happened?
First there was one cult, and then another cult. You met a number of “priests” – one obsessed with sex, another that haunts your memories, and yet another that chased you naked through a bunch of knee-high water in a pitch-black mineshaft. There was a community of plague-ridden monsters, a big monster with a pickaxe that got the shaft, a monster with a tiny monster buddy that crucified and buried you…and many more. It was also occasionally raining blood.
So, again, what the hell just happened? Let’s try to figure it out.
Hell in Arizona
Let's get started with the basics, the hell Outlast 2 calls home is a small town in Arizona known as Temple Gate. Either abandoned or nearly abandoned by the original populace, Knoth and his people found Temple Gate while running from the U.S. Government for the great and terrible sin of tax evasion. Although the town itself may have once been much smaller, it's likely that Knoth and his flock have expanded it quite a bit based off certain references to building and working to make Temple Gate the haven Knoth dreamed it would be.
Documents show that Knoth and his flock are originally from what we're guessing is Albuquerque, a town called Holy Faith, and a group of like-minded apocalypse preppers from Los Alamos. Apparently, Knoth also had a habit of picking up any strays that would follow, no matter their crimes or previous sins.
Knoth considers Temple Gate a literal paradise on earth, granted to him by God so he can raise and care for his flock of borderline psychopaths. As a result of his prophet-god complex, he pretty much uses Temple Gate as his personal playground. Sex, rape, communion wine, murder, torture, child murder, it's all allowed under his gospel – although it seems like it's only allowed with his blessing. Anything outside of what he deems appropriate is dealt with some twisted idea of God-given justice. Usually this means death, torture, or banishment from the primary circle of the congregation, which is usually a death sentence in and of itself.
Knoth's flock is far from united under his all-powerful gospel, causing several splits within Temple Gate. The town itself is occupied primarily by those loyal to Knoth with a small number of dissenters too afraid to speak out. The countryside between the lake and Temple Gate proper is held by the plague-ridden Scalled, and the mines beyond the lake are held primarily by the Satanists led by Val. It's possible that beyond that the land becomes Murkoff territory based off of Blake's reaction when he arrives at the lookout above the lake and a document that mentions one of the notorious radio towers just five miles beyond the mines.
With that in mind, there are three primary factions in Outlast 2, along with a fourth potential shadow faction in the form of Murkoff. We'll focus on the three big ones first, and then talk a little bit about Murkoff's potential role in events.
These three factions include Knoth's flock, the Scalled, and, for lack of a better term, the Satanists. Knoth obviously leads his flock with the help of Marta, the pickaxe-wielding psychopath we're all familiar with at this point, and with the help of Laird, the leader of the Scaled. Val appears to be the primary leader of the Satanists as well as one of the founding members, although it's possible there's more of a hierarchy there that we aren't aware of.
Pretty much anyone you meet in Temple Gate that isn't horribly scared by the plague, dead, or wearing a crazy goat mask is a member of Knoth's congregation. These people worship Knoth as a brand spanking new prophet of the Lord, sent to save them from the wrath of God, the Antichrist, and potentially the Apocalypse.
To that end, they follow Knoth's teachings and his commands without question, killing their own children, allowing Knoth to have sex with or rape their daughters, girlfriends, and wives, and generally doing whatever it takes to keep Temple Gate safe from anything Knoth calls dangerous.
There are likely a number of dissenters within Knoth's flock, such as Ethan, the man that gives Blake a short moment of rest in return for his own life. Ethan is also the father of the heavily pregnant young woman named Ana Lee that leads Blake and Lynn to Temple Gate.
Ethan smuggles her away, claiming that he sent her to live among the Scaled, knowing that Knoth would likely kill her or the child when her pregnancy was discovered. The child is presumably Knoth's, but in the Murkoff Account comics Ana Lee is accompanied by a young man that dies trying to protect her, who could potentially be the father.
Ana Lee makes it to safety initially, but is murdered by a Murkoff employee in the fifth issue of the Murkoff Account.
Val was also at one point a trusted member of Knoth's flock – potentially even Knoth's right hand – but after communing with the Enemy defected to begin the Satanist faction.
Although not strictly an organized faction, the Scalled are the plague-ridden members of Knoth's flock, outcast for any number of reasons, their sickness foremost among them. Knoth has convinced the Scalled that their sickness is the result of impurities within their soul, which only the coming of a “Scalled Messiah” can cure.
This Scalled Messiah will need to undergo a series of trials similar to that of Jesus Christ in order to cure them. The trials begin with communion, then lead to death by crucifixion, after which his body must be buried until he rises from the dead. At this point, the Scalled believe that consuming the Scalled Messiah's flesh will cleanse their souls and their plague-ridden bodies. Because nothing wipes away your sins like cannibalizing another human being.
Laird, the leader of the Scalled, suffers from some form of dwarfism in addition to the disease, and rides on the back of a massive simpleton named Nick. He believes that once the Messiah has cured his people he'll rule among them as a king.
Laird believes wholeheartedly that Blake is the Scalled Messiah and is willing to make him take on his role at any cost, so he forces Blake to take communion from his blood, crucifies him, and tosses him in a shallow grave to percolate like a sack of savior kimchi.
Laird and Knoth seem to work hand in hand at times, and there are several documents detailing their relationship as friendly and mutually beneficial. Laird keeps the Scalled in line in return for food and supplies from Knoth, as well as the promise of a cure and eventually becoming a powerful ruler of his people.
Unfortunately, he isn't well liked by many of the other Scalled, partly because he kills any that try to leave their territory, and inevitably several of them band together at an opportune moment to attempt to kill him by throwing him off the cliff after Blake. It's assumed that at this point he's dead, but only because there's no evidence otherwise.
Contrary to Knoth's claims, the Scalled aren't actually afflicted because of the state of their souls. Based off of several documents you can find as you journey through Temple Gate and Scalled territory, it's more likely that their afflictions are the result of a communal advanced case of syphilis.
The disease is likely spread by Papa Knoth himself, considering he's sleeping with half of his congregation. Knoth has his flock and the Scalled convinced that he's immune to the disease by divine providence, but there are documents showing that he sent members of his congregation for “study aids” in the form of penicillin to treat his own infection.
This implies that Knoth knows the Scalled could be cured with modern medicine, but refuses to provide it in order to maintain control, and as a potential weapon to use against those of his flock that displease him but he can't outright murder.
It's also interesting to note that, although syphilis is likely the cause, that the Scalled are afflicted so dramatically that it makes you wonder if the state of their illness isn't somehow linked to Murkoff and the tumors that patients at Mount Massive Asylum developed. Considering the speculation regarding the use of the Morphogenic Engine in the area, it's definitely something to think about.
It's hard to identify if this faction are truly Satanists. Despite the fact that they're attempting to encourage the birth of the Antichrist, they never actually mention worshiping Satan, Lucifer, or otherwise.
They certainly worship something nasty, but they generally refer to it in ways that make us question whether it's the devil or something much worse. Knoth calls it the Enemy, the Spider Eyed Lamb, and the King of Lies, but in our experience Val only ever calls it True Father, a different God than Knoth's. Which makes it seem both are dancing around the subject rather delicately.
Despite this, “Satanists” certainly fits the theme of goat skulls, the obsession with sex, and the wanton blood sacrifice they practice, so Satanists we shall call them.
It's important to note that this faction is also made up entirely of former members of Knoth's congregation, but each member suffered acutely at the hands of various graphic nightmares that left them sexually aroused at the thought of killing.
Val chronicles her experiences vividly, and finds that the conflict between what Knoth says, the actions he forces her to take, and her reaction to her dreams are reason enough to question Knoth's teachings. Eventually she begins to listen to the dreams and her God, until she defects entirely from Knoth's flock and creates her own deep within the abandoned mines.
This also brings us to the question of Val's sexuality, a topic of quite a bit of debate that's both confusing and hard to separate from the similar struggle within our own culture. By all accounts, everyone in Temple Gate considers Val a biological male, they refer to him in documents as a “he,” and at one point a member of the congregation reports Val to Knoth as potentially practicing a blasphemy after Val makes sexual advances.
It's likely that this blasphemy was a form of homosexuality, which ironically is likely forbidden in Knoth's twisted religion.
Yet Val mentions specifically that she was made “wet” by her dreams, which certainly implies that she doesn't exactly carry male sexual organs. So it's possible that Val was a female disguised as a male within Temple Gate, or that she sexually identifies as female, or maybe that she's some variation of the two. We're not well enough versed in gender roles to know for sure, but it's clear that by the end of the game she's transitioned from an androgynous character to something altogether more terrifying.
Val's character as a whole is interesting in the sense that, at one point, she was considered Knoth's second in command and one of his most trusted brethren. She became guardian to over 40 children when Knoth banished their parents as Scalled, entrusted with their care and in their death as well. We know this because although she mentions not being able to have children of her own, she's happy to share her love with the orphans, who love her dearly. Unfortunately, there are also documents showing she was required to put the children to the knife, which brings us to the conclusion that Val wasn't forced to kill one or two of her children, but all of them.
It's entirely possible that this dramatic event – the responsibility of taking care of, loving, and eventually murdering more children than any other member of Knoth's flock – is eventually what sends her over the edge, causing her to rally other like-minded individuals to begin her faction.
Either way, the Satanists become a faction obsessed with seeing the Antichrist, which they consider the child of their Father, come into existence. They'll do anything to protect Lynn as long as it means she gives birth, and they really don't seem to like Blake despite the fact that their interests are similarly aligned.
This is the most subtly aligned faction, because there are few if any mentions of them overtly in the game. Red Barrels wanted to make you search incredibly hard to find any information concerning Murkoff, and they do a damn fine job of hiding it in documents and references to their comic series the Murkoff Account.
For the initiated, Murkoff is the big baddie in the plot of the original Outlast. They owned and operated Mount Massive Asylum, the setting of the first game, as a sort of massive testing facility for their work with the Morphogenic Engine and the Walrider.
The Morphogenic Engine is a signal used to both control a subject's mind and to cause intense psychological horror in a manner that allows the human body to host and control a powerful, virtually unstoppable nanoswarm referred to as the Walrider. The side effects are often insanity and, even for hosts that don't create and control a nanoswarm, exposure to the signal grants them increased strength, stamina, and speed, along with tumors and sores covering most of their body.
In the original Outlast, Miles Upshur braves the horrors of Mount Massive in order to find out what the hell Murkoff is doing in a seemingly benign care facility after receiving a tip from Waylon Park, the head of IT at Mount Massive. Quickly, the focus shifts to simply surviving, but he uncovers Murkoff's underground laboratory and many of their other secrets all the same.
Inside the lab, he discovers both the Walrider and its host Billy, who is being kept alive within a massive containment shell in a state of suspended animation to make it easier for him to communicate with the Walrider. Miles shuts the system down, which causes Billy's death, but doesn't kill the Walrider.
Instead, the Walrider forces its way into Miles’ body, the horrors Miles experienced within Mount Massive along with the exposure to the Morphogenic Engine apparently enough to make him a suitable host.
Miles is shot while trying to leave, but the Walrider kills his attackers, and Miles is last seen exiting Mount Massive in a nanoswarm tornado by Waylon Park who was experiencing a similar ride through hell in the Outlast: Whistleblower DLC.
Despite the fact that it was assumed that Waylon Park brought Murkoff down in a notorious tell all, it was revealed in an issue of the comics that Murkoff managed to discredit him by fabricating a past of paranoid conspiracy-like delusions.
As it stands right now, the prevailing theory in Outlast 2 is that, although Murkoff is never overtly involved in the plot, pretty much everything that happens is a result of Murkoff exposing the already unstable populace to some version of the Morphogenic Engine.
A Game of Three Stories
It's important to note that there are essentially three primary stories to Outlast 2, one concerning the birth of the Antichrist, one concerning Blake's visions of Jessica, and one hidden just below the surface that concerns Murkoff and their involvement with the course of events.
Each of these plots has quite a bit of overlap throughout the main story and although some parts are hard to miss, others are incredibly subtle and require a lot of conjecture and additional document searching to suss out.
The Primary Story
The main plot of Outlast 2 is centered around the coming of the Antichrist. At it's very core, it's a tale of two factions fighting for control over the birth of a child that they believe will bring about the end of the world.
Knoth and his flock of sheep are dead set on killing the child, and if they have to kill the mother to prevent its birth they'll do so with religious gusto. In Knoth's mind, anyone that dies or sins as a result of something that you could have prevented is the same as sinning or murdering them yourself. Because murdering them to prevent a sin is effectively only the cost of one life compared to thousands, Knoth considers it morally just in the eyes of God. Hence, all the infanticide and the hundreds of other deaths at his own hands. In his eyes, he's not a terrible person, he's just forced to do terrible things in order to potentially save the world.
On the other side of the fence, Val and the Satanists are obsessed with finding and witnessing the birth of the Antichrist. The host really doesn't matter, they're just interested in keeping Knoth away from the whole affair so their Father can see his immortal son walk the earth.
Knoth has elected to kill every child in Temple Gate to prevent any of them from potentially becoming the Antichrist, and Val is gathering a small army of followers so that she can strike and steal away the child when the time is right.
Caught up smack dab in the middle are Blake and Lynn, a husband-wife investigative journalist duo who have the unfortunate luck of landing right in this melting pot of crazy.
Blake and Lynn are investigating the possible origins of a young pregnant girl that was found on the side of the road in Arizona. We now know this girl is Anna Lee, daughter to Ethan in Temple Gate. Unfortunately, thanks to the official comics, we also know that Murkoff had her killed before she could give birth or tell anyone her story.
Despite this, Blake and Lynn have figured out the mostly likely location of Anna Lee's home and rented a chopper to investigate. Cue a blast of blue light, the chopper explodes, and they come plummeting down just outside Temple Gate proper.
Lynn is instantly captured and Blake follows, encountering several of Temple Gate's finest along the way. When Blake catches up, Lynn seems like she's hurt, and it's possible she was raped, beaten, or a plethora of other horrors that we're unclear on. All we know for sure is that somehow all of Temple Gate knows she's pregnant, and they believe wholeheartedly that she's to be the mother of the Antichrist.
It turns out that Blake and Lynn's fiery entrance on a crashed helicopter lines up perfectly with a prophecy Knoth wrote concerning the coming of the Antichrist, so everyone is all set to kill our dynamic duo just to make sure they don't accidentally bring about the end of the world.
Blake and Lynn try and run but are cornered by Knoth's flock, but Val and her band of Satanists step in, killing their captors and whisking Lynn off to the mines.
Blake follows, but along the way another few blue flashes of light ring out just as Blake is about to get captured by Knoth's flock. These flashes render everyone dazed and confused and allow Blake to temporarily escape.
Though the flashes disappear after this point, Blake gets a visit from the hallucination fairy at regular intervals throughout the game. The visions are centered around the secondary plot in the game, Blake's repressed memories concerning his childhood friend Jessica.
Blake continues to deal with these hallucinations as he dodges around Knoth's lackeys and pickaxe wielding enforcer, Marta.
Eventually, Blake finds his way to the chapel where he witnesses Knoth torturing a man and his wife for information. Knoth eventually kills them both, but not before they reveal that Val and her crew transported Lynn to the abandoned mines to give birth.
Blake attempts to make his own way to the mines, but along the way he crosses paths with Laird. As we mentioned before, Laird is the tyrant leader of the Scalled, and after he feeds Blake his blood he decides Blake is the de facto Scalled Messiah, and therefore must be crucified in order to cure his people.
Blake is brutally nailed to a cross and left to die, and Laird takes his camera based on the belief that the Scalled Messiah is meant to leave a book of lessons and teachings for the Scalled once he is consumed.
Blake frees himself from the cross and attempts to retrieve his camera and escape to find the mines. He's hunted the whole way by Laird, and eventually is caught again and buried as part of the process of crucifixion and resurrection Knoth foretold.
Once again, Blake escapes and is hunted by Laird until he finds a rope and pulley system that will take him down a cliff to the lake. Blake retrieves the rope and returns to the pulley with Laird hot on his heels. As Blake climbs down Laird attempts to pull him back up, only to find that the Scalled have turned against their leader after years of abuse and empty promises of a cure.
Laird is thrown from the cliff and lands near Blake. It's assumed that he's dead but Blake doesn't stick around long enough to find out.
Blake makes his way to the lake and it's revealed that something truly sinister and evil lurks just below the surface. Unfortunately, it's the only way Blake has to make it to the mines, so he goes looking for a raft. Along the way, he comments that he can see some kind of complex across the lake with what looks like a radio tower on top.
Blake finds a raft nearby and starts paddling towards the lights. As a heavy mist moves in and something attacks him from below, Blake goes into yet another vision concerning Jessica, but comes out of it in time to retrieve his raft and continue his journey.
Guiding his raft down a narrow set of rapids, Blake can see and hear Satanists watching him from all sides. There are bodies in the river, and it's clear they're just waiting for a chance to strike. Despite all this, Blake makes it to the mining town relatively uncontested.
Inside, things get crazy. Knoth sends in a group of men to retrieve Lynn, but the Satanists kill almost all of them and chase Blake through the mining complex. All the while it's literally raining blood in an absolute torrent – another sign that the Rapture is heading towards Temple Gate like a freight train and that Lynn is soon to be the mother of the Antichrist.
After dodging around enough naked cultists to last a hundred lifetimes, Blake makes it to the mining elevator and lowers himself to the bottom.
After dodging yet more naked Satanists and making his way through the mines Blake is eventually captured by Val, who has officially transitioned from the androgynous figure we first encountered into hell queen extraordinaire, smearing herself with thick mud and donning a crown of thorns. Whatever she has planned is interrupted by a cave in and Blake escapes.
Blake then gets the pleasure of sneaking through a half-flooded set of mining corridors while Val slowly stalks him with a torch in hand. Although he loses her temporarily, she catches up just as he arrives at the ceremony the Satanists have prepared for the birth of the Antichrist. Val swipes Blake's camera and blows some kind of dust in his eyes – possibly an unknown drug, or potentially just a handful of dirt. It's not clear which.
In a twist, Lynn is somehow now nine months pregnant and ready to give birth. She's suspended on some kind of altar and surrounded by cultists waiting for her to give birth. When Blake approaches the altar, Val forces him down on his back and pins his hands to the ground so she can share her terrifying love with him, but this is interrupted by another Jessica hallucination.
When Blake comes to, Knoth's men are beating a number of Satanists to death and Val is nowhere to be seen. Blake sprints through what's left of the mine and finds Lynn at the exit, still nine months pregnant and ready to pop at any moment.
Blake guides Lynn out of the mine into a massive storm complete with high winds, lightning strikes, and fires raging everywhere. They eventually take shelter in the burned out husk of a home and it appears they've arrived back in Temple Gate by some divine providence.
Their shelter is short lived when Marta, our old friend the pickaxe-wielding psychopath, makes another appearance. After a short chase scene where Blake has to avoid Marta and guide Lynn to safety, Marta ambushes the duo and a blast of lightning strikes the nearby chapel, sending the cross at the top flying through the air and spearing Marta through the chest.
Blake guides Lynn into the chapel and she appears to give birth to a healthy baby girl. Unfortunately, the birth costs Lynn her life.
Before she dies, she utters the words, “There's nothing there,” although it's not clear whether she's referring to the child in Blake's hands or the afterlife.
Blake sits on the stairs of the chapel and experiences another hallucination. When Blake comes to, the baby is swaddled in cloth and Knoth is sitting across from Blake on a nearby pew.
Knoth professes that he no longer has the power to kill the child, but urges Blake to do so if he loves anything about the world they live in. Knoth then cuts his own throat and dies on the floor of the chapel.
Blake exits the church with the child, and walks out into the town center where the bodies of Knoth's flock lie everywhere. He looks at the sun and it explodes in a blast of light before his eyes.
The screen cuts to a final vision of Jessica, and then the story goes to credits.
The Jessica Sub-Plot
This portion of the story is told through several hallucinations/visions Blake experiences throughout the main storyline, consistently occurring right when Blake is about to either reach a safe haven or get his skull kicked in.
Although there's seemingly a lot to these visions, they're actually pretty quickly summarized. They revolve around the events that led to the death of Jessica, Blake and Lynn's childhood friend.
Originally it's hinted that Jessica committed suicide by hanging herself somewhere within the Catholic school Blake, Lynn, and Jessica attended. But as the story continues reality is revealed to be much more sinister. It's important to note that the events as Blake remembers them are steadily unlocked in reverse order, which can make things a little confusing at first.
Jessica apparently has experienced a pattern of some kind of abuse and has recently lost her mother – it's hinted that this might be because Jessica's father is physically abusive, but it's unclear.
The full sequence of events involves Jessica meeting Blake after school, they sneak into the cafeteria supply closet and Jessica asks Blake if he's kissed Lynn as part of their roles in the school play.
Blake responds with a no, which prompts Jessica to ask if Blake and Lynn are a couple. When Blake refuses to respond, she wrestles him to the ground and forces him to either answer the question or say that she wins.
Blake concedes but doesn't answer the question, and the two go walking through the halls hand in hand. Jessica asks when Blake's parents get home, and then asks if she can come over. Blake agrees but wants to know why.
It's possible Jessica is trying to delay the need to go home to her father, but because of her seeming romantic interest in Blake it's possible that she has other plans as well. It's worth noting that sexual interest at such a young age is also potentially a sign of sexual abuse.
Before they have a chance to continue their conversation, Blake and Jessica are interrupted by the Catholic priest in charge of teaching music, Father Loutermilch. Loutermilch demands to know what they were talking about and threatens to call their parents.
Things get decidedly creepy when Loutermilch says that he thinks he can work something out with Jessica and tells Blake to go home. When Blake leaves, it's heavily implied that Loutermilch is either the source of Jessica's sexual abuse, or is about to commit the abuse for the first time.
Blake is forced to walk down the longest hallway in video game history, but before he reaches the end he hears Jessica scream, and runs back just in time to see her sprinting down the hallway with Loutermilch not far behind.
Blake chases the duo and arrives at the base of the stairs just in time to find Jessica bleeding at the bottom. Judging by the bruising it looks like she was either strangled, thrown down the stairs, or some combination of the two, causing her neck to break. Loutermilch is at the top of the steps.
Loutermilch convinces Blake that he didn't actually see what he thinks he saw, and it's heavily implied that Loutermilch then stages Jessica's suicide by hanging. He somehow manages to convince Blake to report that he found the body, and Blake represses as many of the memories as possible, although it appears that he's guild-ridden over the whole affair.
The Murkoff Subplot
The Murkoff Subplot is where things go from subtle to downright hidden. We've already discussed several of these issues in our article about whether Lynn's child is real, but we'll cover much of the same content here.
The strangest thing about Murkoff's role in Outlast 2 is that, at face value, there doesn't seem to be any. The story comes off as a bit of a straightforward tale of a guilt-ridden man losing his sanity as he travels through the veritable end of times.
Red Barrel takes advantage of our natural suspension of disbelief as an audience to imply that this band of cultists are insanely demented simply because they're crazy, nothing more, nothing less. Yet they also intentionally leave it just open-ended enough, with just enough breadcrumbs sprinkled throughout, that if you ask the question, “Why are they so much more crazy than most crazy?” you'll find an additional plot lying just below the surface.
In a way, this plot drives everything else forward because it literally creates the atmosphere for things to go stark raving mad. It drives hundreds of tiny wedges into every crack of Knoth's little society, prying it open a little at a time until even infanticide seems like a rational course of action.
Keep this in mind as we don our tinfoil hats.
Murkoff's Suplot is focused on the idea that there are several camouflaged towers hidden throughout Temple Gate's countryside, each of which is capable of transmitting a low level signal to everyone in the valley, with the ability to emit a larger pulse to cause dramatic hallucinations.
We see these pulses several times throughout the opening act of Outlast 2, the first occurs right before Lynn and Blake's helicopter goes down and instantly triggers Blake's first Jessica flashback.
The next few occur when Blake is surrounded by cultists, and we get a chance to see members of Knoth's flock go from openly hostile to passive and terrified, walking around like they can't see the real world anymore. In the background, Knoth's gospel drones away on every speaker in town.
Later on, these flashes disappear entirely, replaced presumably by Blake's visions of Jessica. We can safely assume that Blake at this point is incapacitated the same way Knoth's flock were at the beginning of the game, wandering around in his hallucination until he comes out of it in an entirely alien location. This occasionally works as a plot device allowing Blake to escape certain death, likely because those trying to rip him to pieces are experiencing hallucinations of their own.
We don't know much about the specific effects these flashes have on everyone, but it's probably not a stretch to say that Murkoff is combining the Morphogenic Engine with repetitive conditioning to make Knoth's gospel teachings seem like the only truth in the world. It's apparently enough to convince mothers to slaughter their children, and fathers to open the beds of their daughters and wives to a man like Knoth. If this is a result of some kind of orchestrated mind control on the part of Murkoff, it’s absolutely terrifying.
The references to Murkoff's towers are few and far between, but you can find a note in a cave on the edge of the lake that details one hunter's experience when he first encounters a tower. When he approached, he immediately started to experience what he called a waking dream, with flames, insects, and sexual organs everywhere. It took him hours to come out of the dream, and by the time he did he had walked so far he had no idea where the towers were anymore.
You can also hear Blake reference seeing a tower far in the distance if you look out over the lake after
climbing to the top of the cliff between the two docks. He also hints that there may be some kind of civilization near the transmitter, which may mean that Murkoff has a hidden base nearby.
There are also several pictures of radio towers tied to an official Red Barrel tumblr account called the Murkoff Report. Each depicts a large radio tower from varying distances with the captions, “people are getting hurt and Murkoff is making money,” and the much more haunting, “please let there be no dreams.”
The implication is that even if we never see it overtly stated in game, Murkoff has a strong but subtle presence in the area, broadcasting some variation of the Morphogenic Engine over the airwaves as a low sub-audible tone, and occasionally as a blast of light and sound via these relay towers.
There's also a final, recently released tidbit explaining the effects of the blue flashes in the fifth Murkoff Account comic, which depicts one of the main characters wandering the desert until he sees a blue light flash before his eyes. He immediately loses all touch with reality and flashes back to the day his wife passed away. He continues to see her shade for miles afterward, even after being stabbed and forced to kill the man guiding Anna Lee away from Temple Gate.
We suspect that the signal Murkoff is transmitting from the mysterious towers also helped along the Satanists separation from the primary flock, and that either severe emotional trauma creates a sensitivity to the signal, which would fall in line with what we know about the Morphogenic Engine, or that some people are innately more susceptible to its effects.
Approaching the tower itself reportedly caused intense sexual arousal along with various hallucinations in the hunter, which parallels Val's experience and the experience of a few other villagers almost exactly. Their dreams were consistently followed by intense sexual need, which became a core element of Val and the other Satanist’s MO.
Additionally, it's worth noting that this effect was proximity-based in the document, so the Satanist’s base of operations in the mines was likely in similarly close proximity to the tower and the complex Blake sees at the lake. It would make sense that Val and her flock would want to be as close to the source of their dreams and sexual arousal as they could possibly stand.
The real question is why Murkoff would set up any of this. We don't have even the foggiest idea why Temple Gate is worth all this trouble.
It could be it's all just an experiment to test the ME's effect on a large population, to see if it can effectively drive a society mad or be used to control people to the point that killing their children is an acceptable part of life.
It could be that Blake and Lynn's child is meant to be a biologically perfect host for the Walrider, and that somehow Knoth picked up on Murkoff's plans, interpreted them as the whisperings of the devil, and assumed that the Walrider was the real world equivalent to the Antichrist.
Hell, it could even be that none of this has anything to do with Temple Gate at all, and Murkoff has some other activities in the area that requires they transmit the ME signal via these towers, and Knoth managed to settle down in exactly the worst possible location. Like living underneath a massive powerline that makes you want to murder the mailman for not organizing your post alphabetically.
There are hundreds of possible theories, and we have no way of confirming any of them. Which means that we're pretty much at Red Barrels' mercy until they either release another comic, or hopefully a long, detailed set of DLC.
If you can't get enough Outlast 2 story talk, make sure to read our interview with Red Barrels and our breakdown of the evidence of the reality of the game's events.