The game's set in the abandoned Mount Massive Asylum in the remote mountains of Colorado, but re-opened by the "research and charity" branch of the transnational Murkoff Corporation.
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New story DLC expands on the events of the original game.
It's obvious what happen in the end anyway, unless SOMEHOW he's kept alive with the Walrider.....that would just be silly...ha....ha.....oh, who am i kidding? That's probably what's happen anyway.