The Collective Unconscious is an intangible medium that existed ever since the beginning of the universe. It is neither perceptible nor physical and it houses the collection, or aggregate of deceased people's consciousnesses or souls, but specifically in Xenosaga, the wills of humans. The Collective Unconscious is located in the imaginary number domain of the Lower Domain and few are aware of its existence.
The U.M.N. uses the Collective Unconscious as a network infrastructure. Gnosis exist in the same region, namely, the imaginary number domain, and so this is why the Gnosis encounter rate is high within the U.M.N. and Encephalon.
Normally, when the deceased die, their "wills" or souls/consciousnesses intermingle and eventually become one with the collective unconscious. However, when someone who experiences hatred, malice, and/or contempt dies, they possesses the factor of rejecting to join with the collective unconscious, or rejecting to be one with the souls of the deceased. These consciousnesses who reject to join the collective unconscious eventually polarize with it and later turn into Gnosis in the imaginary number domain of the lower domain.
Wilhelm's role Edit
A part of Wilhelm, the Compass of Order and Chaos, displays the flow of consciousnesses within the collective unconscious. He uses this to analyze and forecast the state, or flow of consciousnesses/wills, of the lower domain and its vulnerability of dissipation, or the total eroding of the collective unconscious which will lead to the destruction of the entire universe, both lower and upper domains.
Wilhelm also possesses the power to manipulate certain consciousnesses within the U.M.N. For example, he turns Kevin Winnicot, Erich Weber, Albedo Piazzolla and Luis Virgil into Testaments and assist them in remaining within the imaginary number domain without being turned into Gnosis despite the fact that they have not joined with the collective unconscious (perhaps until they die from the imaginary number domain).
The Collective Unconscious and the universe Edit
As history progresses within Xenosaga, from the beginning of time to point of Eternal Recurrence, human beings are mandated and somewhat preordained to conflict with each other. Hatred, insecurities, pain, contempt, malice, anger, etc. become undeniable and unavoidable emotions elicited by humans within the real number domain of the lower domain. But it is the ones who die with these surges of negative feelings and emotions that come to reject the joining with the collective unconscious. As time progresses, more and more consciousnesses will eventually reject the collective unconscious and gradually cause the dissipation or scattering of wills. The scattering of consciousnesses, which are supposed to be a collective whole. will eventually lead to the destruction of the universe.
Furthermore, Zarathustra, a relic of god, when triggered by Mary Magdalene (Maria), who is granted access to it by Shion Uzuki (the maiden of Mary), brings humanity's consciousness/wills into Zarathustra before the domain shift.