Grey awakens from his first death to find himself back in the white room, the mechanical arms repeating their malfunction. The realization that he has been sent back in time hits him like a physical blow. He watches the same events unfold, the same floating head announce the same games, the same glitch that leaves him without a Nexis Suit. The rage that fills him is not the hot fury of a fighter but the cold despair of a man who knows he is trapped. He dies again, and again, and again. Each death teaches him something new about the system, about the goblins, about the archer named Fitz who keeps killing the girl named May. But each death also strips away his hope. By the time he triggers the Rare Instance with the Last Goblin Swordsman, he has died four times. The Prometheus ring gives him a way out, but it also tells him that his loops are exhausted. He has one chance left, and he must make it count.

Grey races through the ruins outside the city, fighting Skrills and Verxans with a newfound precision that comes from his Goblin Warlord Spirit. He finds the Ancestral Tome of the Mechanical Jaw lineage and learns to craft a vessel for his Prometheus Spirit. The forging process is excruciating. He must fuse a metallic jaw to his face, enduring pain that feels like his bones are being shattered and rebuilt. But the result is worth it. His Energy Reserve stabilizes, his Sync Rate activates, and he gains access to the Cyber Space that allows him to interact with the system without a Nexis Suit. The Looping Necklace he took from May's corpse accelerates his skill growth, pushing his Goblin Warlord Spirit to Level 5. He is no longer a helpless victim. He is a craftsman of his own destiny, and he will use this power to burn the entire system to the ground.

Grey enters a Rare Arc Instance that transports him to a flashback of the past, where he meets a younger version of the Wicked Forest Witch named Esmeralda. She is a powerful mage who has been hunting the vampire lord that destroyed her coven. Grey allies with her and the shadow-wielding Amunet to infiltrate the vampire lair. The battle is brutal. Grey uses his Magnetic Hero Frame to push and pull enemies, his chainsaw to carve through flesh, and his iron jaw to absorb metal and replenish his Energy Reserve. But Esmeralda is not a true ally. She is a predator who sees Grey as a tool. When he tries to craft a Ball Bearing Eye Prosthetic Mech for her, she betrays him, revealing that she has been using him to repair her own damaged Neural Frame. Grey turns the tables by weaponizing the diagnostic errors in the prosthetic, causing her head to explode. The arc ends with Grey and Amunet standing over the witch's corpse, but the victory feels hollow. The Producers are still watching, and Joaquin is still hunting him.

Grey returns to the city as the first contestant to clear the tutorial zone, earning a City Edict that allows him to break any single rule. He uses it to register himself without a proper Nexis Suit, bypassing the system that would have labeled him a criminal. But the Producers have already set their trap. Joaquin, the handsome politician who killed Grey in an earlier loop, has been given a quest to hunt down the murderer of May and Fitz. He uses his own reward to track Grey's location and sends Sabrina and Eli to ambush him in the ruins. Grey kills them both, taking their treasures and learning that his fame is growing. The Great Udon appears to announce Grey's crimes to the entire zone, painting him as a psychopath who preys on women. Grey knows that the only way to survive is to become exactly what they fear. He will be the monster they created, and he will make them regret ever putting him on this stage.