BioShock is set during 1960, in Rapture, a fictional underwater dystopian city; its history is revealed to the player through in-game audio recordings scattered throughout the game.
Rapture was envisioned by the Objectivist business magnate Andrew Ryan as a laissez-faire utopia for society’s cultural and scientific elite to avoid the oppression of government and religion. He secretly funded its construction on the mid-Atlantic, utilizing submarine volcanoes to provide geothermal power, and Rapture was completed by 1946. Despite Ryan’s attempts, a seedier side of Rapture formed, led by businessman and gangster Frank Fontaine, who secretly managed to maintain a black market for goods to and from the surface. Scientific progress flourished within Rapture after the discovery of a new form of sea slug by Dr. Brigid Tenenbaum; stem cells from the slugs could be used to create “ADAM”, a plasmid that altered its user’s DNA and would grant him super-human powers like telekinesis and pyrokinesis. An industry for plasmids was created by Tenenbaum and Fontaine. To meet the growing demand, Tenenbaum devised a means for the sea slugs to be embedded in the stomachs of young girls from Fontaine’s orphanages, named Little Sisters, producing large quantities of ADAM.
As plasmid use grew, a class division arose. Fontaine launched a war against Ryan using an army of plasmid-enhanced soldiers, but was apparently killed in the fight. Ryan seized Fontaine’s assets, including the plasmid industry. Some months later, a new figurehead for the lower class arose, going by the name of Atlas. Atlas’s forces attacked Ryan’s industries to steal the ADAM and Little Sisters. To fight against this, Ryan ordered the creation of “Big Daddies”, plasmid-enhanced humans contained in giant diving suits conditioned to protect the Little Sisters as they scavenged for ADAM.
Ultimately a complete breakdown of Rapture’s society occurred on New Year’s Eve of 1959 (about one year before the player in the game arrives at Rapture). Atlas launched a full-fledged attack on Ryan’s forces; Ryan in turn was forced to create his own plasmid-enhanced soldiers, nicknamed Splicers, controlled by pheromones in Rapture’s atmosphere. The resulting war left few survivors. Those that remained alive barricaded themselves in isolated areas of Rapture, while the remains of the Splicer armies, having become deranged over time due to heavy ADAM use, wander Rapture looking for more ADAM to consume, which the Little Sisters continue to harvest from corpses.