#6 As a Catholic, like some other posters I saw some religious overtones to the film. This last theory is thus an interpretation of Avalon as a kind of Christian parable. I'm having fun; don't be offended if you're not Christian or religious!
The sepia reality, wargame, and Class SA are all virtual. That is why the ghost girl appears in all three (for the sepia appearance – see the hospital alcove), the dog appears in both Class SA and the sepia world, and the book appears blank to Bishop in the sepia world (because he controls that reality too). Initially, Ash is content with the wargame escapism and her attachment, in the “real” world, to her dog. But when the dog disappears, and she has no more attachment to her material world (she doesn’t even like eating—see her reaction to Stunner’s frenzy), she is ready to move on to a more “spiritual” world, something above both her reality and the wargame. She could not have really done this before, since Jesus said, “he who sets a hand to the plow and looks back at what was left behind is not fit to enter the kingdom.” Now that she is ready, she needs a Bishop (religion) to do so, because it is the religions that deal with higher planes of existence. The Bishop likewise selects her because she is one of the best warriors (as Jesus said, “strive to enter through the narrow gate, for many, I tell you, will attempt to enter but will not be strong enough”). Yet he still leaves it up to her to choose (as per free will). In return for doing something “moral”—killing Murphy, who we shall see later is a devil figure—she will become a developer (and thus one with the ultimate developer—God). Murphy has stopped in Class SA because he believes it is the real world—after all it’s very convincing—but as the Upanishads say, “what lies beyond life shines not to those who are childish, or careless, or deluded by wealth. This is the only world, there is no other, they say; and thus they go from death to death.” Murphy, unknowingly in the role of devil/tempter, thus tries to convince Ash that Class SA is the real world and there is no other. But Ash knows better, because the Bishop has told her so, and she has faith in his words. When Murphy sacrifices himself by pulling the unloaded gun, he thinks he is doing it to show her Class SA is in fact real—making the ultimate sacrifice for her, rather like Jesus. And again like Jesus, although inadvertently so, his death, by the dissolution of his body, showed that the Class SA world (aka our world) was not the final one, that there was another beyond it—aka Avalon/Heaven. Once Murphy dies, once she has beaten the voice trying to persuade her there is no God/Heaven, she can advance. So she goes and finds the ghost, and shooting it will take her to the next level—the final level, paradise, Avalon, the ultimate reality where she joins the creators as we do when we go to Heaven and join the Creator. Avalon in Arthurian legend is a place of rest for good warriors, as Heaven is a place of rest for good people. But for some reason the movie stops and we see a “Welcome to Avalon” screen before we know whether she shoots the ghost, though it seems like she will. I think that she does shoot, and then enters Avalon (like the soul ascending into heaven).
More Thoughts on This One: That the Bishop (who can also been viewed as God himself) had control in all three classes shows God’s omniscience and power—it is only because of His will that our reality, virtual reality, and heaven exist. Even the text in books (i.e. the King Arthur book) does not exist if Bishop/God does not will it to. Likewise, the dog disappears because the Bishop no longer wills its existence.
The Stop Avalon signs in the alleged real world are representative of the way our culture constantly tells us not to seek something higher, via hammering away at the religions and making idols of sex and money. Stunner had given up and accepted the sepia world, he thus represents the culture, and that is why he eats so frenziedly—because eating is one of his few pleasures in life and he has nothing else to look forward to. He misses shooting the ghost because he is not meant to—he has not lived a life that would merit Avalon, i.e. how it was actually Stunner who called reset.
That Class SA is so sophisticated but still not real, according to the Bishop, is characteristic of how, because life seems so real, we tend to think it is the final reality and there is nothing more. Similarly, the sepia world is the only reality Ash has ever known, and so she does not naturally perceive that there is something beyond it.
That Murphy appears in Class SA, though his body is no longer hooked up to VR in the sepia world, mirrors how our bodies exist (buried in the ground) after we die but the soul moves on and continues living in another world.
Thus the film is a comment on how we have the right idea of escaping our world to something better via video games, but that there is an even greater reality above games that even fewer people find, but it is the ultimate (timeless) reality: heaven. Class SA is our world, there is another beyond it. We need God/religion (Bishop) to guide us there. If this sixth theory is indeed what Oshii intended, then the reason he created four worlds in the movie, when in reality there are only three, is to show how even our current reality is or could be “fake.” With just the VR world of games and the spiritual one that not everyone believes in, you cannot really show that there is a sensible way in which another reality could exist (although you can’t disprove it either). But in the movie, by starting from the premise that the sepia world (the fourth one) is real and then finding out it is not, we can see how our present world could be “fake” too.
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