Nailing down the setting of Persona 3 can be a little difficult. There’s a bit going on here.
As is traditional for an SMT game, Persona 3 takes place over a much smaller geographic area than most other rpgs, in this case limiting itself to a single city, Iwatodai. Iwatodai is a large coastal that is a major area of operations, although not the headquarters, for a major business megacorp, the Kirijo Group. Much of the city’s landmass is made up of an artificial island, Tatsumi Port Island, that I would guess the Kirijo Group played a major hand in constructing. It comes complete with all the major amenities you’d expect a large city to have; schools, shopping centers, train stations, residences, etc.
The Kirijo Group seems to have their hands in half of everything that goes on in Iwatodai. They own the school, your dorm, the shopping mall, tons of businesses, probably your dog, some of the residents might be their slaves in disguise, it’s hard to draw the line there. And we’re going to get into spoiler territory from this point forward, so watch that. The Kirijo Group used to be a part of the Nanjou Corporation, of which one of your characters from Persona 1 and 2 was part of. They went independent some time ago, but still maintain a pretty close partnership there. Perhaps because of this connection, they became aware of the supernatural, particularly the persona that your crew use and the shadows that are newly introduced this game, and were experimenting on them, their owner eventually seeking to use their powers to create a ‘time manipulation device’. Not a time machine. A ‘time manipulation device’.
Of course, as with every experiment ever conducted, this went wrong and almost destroyed the world. Well, in this case, it ended up creating the whole dark hour deal that we mentioned earlier. Whatever time manipulation magic they had going on there ended up inserting an extra hour into the day between midnight and midnight o’ one. The experiment was conducted in what would become Gekkoukan High School, so, as that’s the epicenter of the event, it faces the most drastic transformation, becoming the dungeon tower Tartarus during the dark hour. Everywhere else gets bathed in a sickening light, gets inundated with bloodstains, and sees monstrous shadows prowling all over the place. So yeah, dark hour, not exactly pleasant times. Although, you know, you can just stay in your dorm and get an extra hour of sleep. So, on the bad side, people are either dying or having their desires consumed and becoming one of the Lost. But on the good side, you get to be better rested. So I’d say it’s really a wash.
Lets talk about the Shadows a bit. Persona 2 introduced Shadows already, although these are quite a bit different. Like the Shadows from Persona 2, these Shadows were created by the collective unconscious, but that’s where the similarities end. The Shadows fit a lot more fully into the Jungian Psychology mold the game series has been using, being manifestations of the parts of the emotions, thoughts, and feelings that people don’t want to acknowledge. In Persona 3, they gather in the collective unconsciousness, clumping together until they take some monstrous physical form. Which is then vulnerable to pummeling. Most people will transmogrify into a coffin during the dark hour, which is apparently a defensive instinct, them playing dead so the Shadows will ignore them. Not everyone does, though. Some keep their form, and serve as prey for the monsters, their minds being eaten and forced into Apathy Syndrome until our heroes beat the big shadow boss at the next full moon, and temporarily drive the shadows back. Some will endure the dark hour until they get taken over by their own Shadows, their physical form dissolving and being replaced by a Shadow themselves. And some just do fine, there.
There’s not a whole lot in the game to dictate why people enter into the Dark Hour without transmogrifying. I can make some conjecture, though. Survival instincts can be simplified into being one of fight, flight , or freeze. Transmogrifying into a coffin would be a pretty freezy habit. It could be as simple as those who don’t transmogrify simply have another instinct take its place. As Persona 3’s expansion, The Answer, and Persona 4 indicate, a Persona is a Shadow that’s been mastered and is able to fight against them. So the Persona-users who don’t transmogrify would do so simply because they have the ability and the will to fight the Shadows. Their survival instinct falls into the ‘fight’ category, so they don’t ‘freeze’ into coffins. Those poor souls without that power who end up falling victim and becoming the Lost could well be those who are more given to flee than to freeze, whose instincts tell them to get out of dodge rather than hide or wait for them to go away. Since running away hasn’t proven to be very effective against the shadows, it doesn’t typically end up well for them, as far as we can see. Some people are able to calmly enter into the Dark Hour once they’re aware of its existence, and for those, I’d assume it’s because they don’t feel the need to trigger any of their survival instincts at all. For that matter, we do see at least once that persona-users are able to get people out of their coffins and into dark hour awareness, although we’re not given much in the way of an idea as how they can do that. I could theorize within the framework I’ve already established, but I’ve probably conjectured away from the base enough.
Persona 3 is strangely sparse on details of the Dark Hour. Which is a little strange, given the series. Personas 1, 4, and 5 were very clear on where their alternate world comes from, and 2 had everything taking place in its own world, and so didn’t need to bother with it. 3’s just not explicit. Although the series has gone to the ‘collective unconsciousness as a physical location’ well before, and will do so again, that’s not the case here. The Dark Hour is explicitly related to the existence of shadows in some way, and specifically related to Nyx, the shadow embodying humanity’s desire for death. Perhaps it’s for that reason the death and blood imagery is all over the place during the dark hour, and that the dark hour is so draining to everyone within it. After all, the depression and anguish that would be embodied in the dark hour would be rather draining. It’s not explored whether the dark hour is a local phenomenon, or something that happens world-wide.
Like much else, Tartarus, the massive tower that your school turns into during the Dark Hour, is super symbolic and representative of the game’s themes. In this case, it’s representative of the theme of the developers desire to have a place for you to grind. And that’s about it. Really, as much as I will go out of my way to connect poorly arranged pieces of a puzzle in a story, I can’t find a fit for this one. Tartarus is barely connected to the plot, doesn’t really seem to have a thematic fit outside of its reaching for the moon, and doesn’t really seem to deliver anything narratively. It’s where you go to fight shadows when you don’t have a plot-related mission or anything to do. Akihiko considers it a training ground, and we could say, given that it’s growing out of the spot where shadows were unleashed into the world, it’s a hive or nest for shadows. Mayhaps this is where the new ones emerge into the rest of the world from. It’s established that time flows differently there, as Fuuka was trapped in Tartarus for days, yet felt only a few hours passed. It’s also the spot where Nyx is destined to make her descent. Otherwise, it’s mostly a Macguffin. It’s something the story tells you is important, but doesn’t really do all that much to establish it. It does serve, however, as a massive call back to Persona 1’s Snow Queen quest, being a big tower made out of a school named Tartarus that has Nyx at the end of it.
Perhaps the most striking thing about Iwatodai, outside of all the supernatural stuff and hidden magic conflicts and stuff going on there, is the people in there. Overall, it’s a pretty dour, selfish group. And that comes through a lot. This is a community that largely just leaves the Lost, people who have overall lost any ability to take care of themselves or do anything, completely alone, as long as they’re out of the way. We don’t see them do much to help out the invalids right in front of them. Moreover, this is also the same community that readily organizes into doomsday cults given little provocation and actively takes part in murder requests once the rumor gets out that they work. Missing students get ignored. The fact that the hospital can hold people against their will on behalf of the Kirijo Group is forgotten. Students will whine about going to classmates funerals. Scam artists can proliferate there with little reprisal. The horrible things the town and the people therein are going through end up treated as little more than gossip to most. Even in your social links, oftentimes you’re running across people completely self-centered, thinking only of their own path through life and not how they pave over others.
And yet, even then, there’s glimpses of good in people. Starting with your crew, who through all the traumas they’re going through, still keep their eyes on the common good and willingly sacrifice themselves for others, up to and including their very lives. Many of your social links will see people come to a realization of just how self-centered they’re being, and turn around to make amends and improve other’s lives. And, in the end, all your friends do come around for you, too. It’s small, in the wake of the self-centered juggernaut that is the town as a whole, but you can find lots of people with real gems inside of them, you just need to brush off the dirt to get there with many of them.