This is Cinematic 1.3 of The Matrix Online, an MMORPG set after the Matrix trilogy. It lasted from 2005 to 2009 before closing down.
Early in the story, Morpheus decided to pressure the machines into giving Neo’s body back to Zion, suspicious as to why they kept it but claimed not to have recycled it. Morpheus went about planting “code bombs“ disrupting the Matrix’s code in an effort to coerce the machines into action, but to no avail. For reasons I don’t remember, the Merovingian hired the masked man seen in the cutscene, known as the Assassin, to kill Morpheus or at least make him unable to jack into the Matrix. Usually in the post-movie storyline, a person who is killed in the Matrix is forcibly jacked back out, rather than killed in real life; this was due to an “emergency jack-out“ program that was “invented“ after the films’ story concluded--a way of accommodating the fact that players would sometimes die ingame without permanently deleting their characters.
The Assassin, a program made of a swarm of flies, was later defeated by a team led in part by Niobe (by the use of insecticide).
Morpheus apparently died, but the community of players debated for years afterwards whether he had really died or not. There was some evidence to support either case. His body was never found in the real world, nor did he ever make contact with any would-be allies. I recall that a representative of the Merovingian claimed not to have given “kill-code“ bullets to the Assassin (which is code that kills a person permanently), but that the code they used in the bullets was intended to make Morpheus unable to get back into the Matrix. There is no telling whether he was truthful or not. I do not remember whether the bullets did in fact contain “kill-code.“
As far as I recall it was never cleared up whether he was alive or dead. I’m pretty sure he was never seen again, although there was a brief time when someone impersonated him. The game closed down due to low subscriber numbers before the story could be given any real conclusion. All things considered, the story was fairly terrible for the most part, but occasionally became quite interesting.
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