The Morphogenic Engine is a machine used in Mount Massive Asylum's underground laboratories by the Murkoff Corporation to allow patients to take control of the Walrider via lucid dreaming.
The Morphogenic Engine is a strange tool employed by Murkoff to allow patients, while being carefully monitored, to enter prolonged lucid dreaming states, and control the Walrider, acting as its host. The exact details of this process are unclear.
In Outlast, the Morphogenic Engine is seen in the Underground Lab. Miles is tasked by Dr. Wernicke to kill Billy Hope, hoping to destroy the Walrider. Miles first disables other mechanisms keeping Billy alive, and then proceeds to override the failsafe of the Engine, causing Billy to die, and releasing the Walrider.
In Outlast: Whistleblower, Waylon is tasked with helping the computers in the underground lab communicate with an ASL unit, and cameras inside of the pods that keep Variants alive, and stable. He was subjected to the machine's experiments when the email was discovered, but the Walrider's escape freed him before he devolved into a Variant, allowing him to function normally.