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Space is alive with the sound of screaming
In the future, mankind runs out of resources...
Right now, the world's population is 7 billion strong and growing, and humanity wages war over resources all the time. Fast forward a few hundred years, and one could speculate--barring any world-crushing catastrophes--that poor Earth would be completely stripped of anything remotely useful. That means no more video game consoles, no more 300" HHHHHHHD TVs, no more iPhone 252s, and a lot of super bored humans, who are all strangers to the ancient practice of "playing outside."
Something--anything--had to be done to save mankind from the everyday monotony of recording audio logs and text logs (which were, for some reason, always written in all caps). Someone had to step in, to make things right. The Concordance Extraction Corporation answered the call.
...so they construct giant ships to harvest resources from outer space
CEC, a prominent company in the deep space mining biz, came up with a way to harvest previously untapped resources by building giant spaceships called planet crackers. These may sound like giant Saltine treats, but they're essentially Death Stars. The planet-cracking process took about three years to complete, and it basically consisted of the aforementioned ships exploding entire worlds into giant chunks, then refining those chunks into useful...stuff.
Thanks to CEC's small fleet of planet cracker-class ships--with the USG Ishimura being the first and most famous--mankind was restored to greatness, and people could finally buy iPads again. The world (and all of Earth's space colonies) rejoiced.
The USG Ishimura went missing and a crew was sent to investigate
During one of its planet cracking expeditions, the USG Ishimura sent out a distress signal just before all communications with the vessel were severed. Unwilling to lose its most iconic (and expensive) spaceship, CEC deployed a crew to investigate. One member of the crew was series protagonist Isaac Clarke, an engineer, who signed up for the mission because his girlfriend Nicole worked on the Ishimura.
But once Isaac and company landed on the giant ship, they found it deserted--odd, considering it was home to dozens of CEC staff members. The only clues they could find regarding the whereabouts of said staff members were in the form of the blood stains that coated the floors of the Ishimura's lobby. HMMMMM...
It turns out the crew of the USG Ishimura had a secret agenda
That's when Isaac and his group were besieged by horrific monsters with knives for hands. With only his trusty Plasma Cutter--the hacksaw of the future--at his side, Isaac dismembered his way through the murderous hordes of creatures, all the while being harassed by hallucinations of Nicole. Who, it turned out, was totally, 100-percent dead.
Later, Isaac discovered that the USG Ishimura's true objective during its latest planet cracking excursion wasn't to harvest resources, but to recover a strange alien obelisk--called the "Red Marker"--and bring it back to Earth. Realizing how horrible of an idea this is, Isaac destroyed the Marker and escaped into space via shuttle. But what exactly was that Marker thing? Well, to understand that, we have to rewind time a bit...
Humans discovered a Marker 200 years earlier
In the year 2214, a scientist named Michael Altman and his team of science friends were busy researching an asteroid impact crater off the Yucatn Peninsula. There, they eventually discovered a strange alien artifact buried deep in the crater's center in the Gulf of Mexico.
At first, everyone was super pumped about the discovery, and they built an underwater facility to house and study the artifact--dubbed the Black Marker--in between congratulatory high fives. For a while, people were all like "omg can you believe we found this cool, twisty-shaped rock thing?" Alas, their celebrations were cut short, as they quickly discovered that the Marker was bad news. Why? Because...
The Marker drove people insane and turned dead bodies into monsters called Necromorphs
The Marker emitted an ultra high-range frequency, which basically drove everyone nuts. At the very least, they'd experience a concerning range of nasty side effects, including hallucinations and the desire to perform ritualistic suicide. Obviously, this was problematic for the people studying the thing.
But what was more problematic was the effect of the Marker's signal on the dead. It reanimated the cells of organic tissue, contorting and twisting the muscles and bones of the deceased to form horrific creatures with a penchant for bloodshed. Those monsters are called Necromorphs, and though there are many variations, most of them look like zombie versions of Edward Scissorhands. What's more, they're all but immune to bullets. The only way to put them down for good is to dismember them, limb by limb.
Michael Altman destroyed the Black Marker in hopes of saving mankind...
So, Necromorphs were running around the Black Marker research facility, murdering everyone in incredibly imaginative ways, and Altman decided that wasn't a good thing. Also, he was surprisingly immune to the insanity-inducing effects of the Marker, which the crazies who were still alive interpreted to mean that he was some sort of prophet to which the artifact spoke. We'll get to this in a bit.
After many a close call, Altman survived insurmountable odds and successfully blew up and destroyed the underwater facility--and, supposedly, the Black Marker along with it. Pretty much everyone was pissed about this, including the Earth's Government (uncreatively named EarthGov), which funded the research, as well as the crazy fanatics who believed the Marker to be a sign from God.
...but was killed so that a new religion could be formed
Right as the whole Marker ordeal came to an end, poor Altman was captured by two government employees. These guy had gone off the deep end, fully believing Altman to be a religious icon--so they murdered him, billed him as a martyr, and used his death as a catalyst to form the Church of Unitology.
Fast-forward 200 years later (when Dead Space takes place), and Unitology had become a widely practiced religion. Its leaders proclaimed that humans were the creations of intelligent alien design, and that the Marker was the Holy Grail that would grant religious followers eternal unity. Which it did--except, you know, in Necromorph form. We know what you're thinking: "How could Isaac fight against murderous monsters when he's just an everyday space engineer?" Well, funny you should ask.
Isaac's equipped with a neon-colored exoskeleton called a RIG
Well, more accurately, he was equipped with Resource Integration Gear (RIG for short), which kind of made him look like a bizarre robot/human hybrid. RIGs were utilized by much of humanity's adult population in Dead Space's lore, as they made for great health monitoring systems (as indicated by the color of the spine-mounted display) and strength augmenters.
Even the most basic of RIGs contained holographic projectors on the wrist, which acted as a GPS device for directing the user to a set path of coordinates. More complicated RIGs, which were often equipped to the heavy-duty suits of service workers (like Isaac), had modules installed to allow for the use of Kinesis and Stasis. What are those? Well...
