Concept and creation
Even though Nightmare originally debuted on Soulcalibur, its predecessor, Soul Edge, featured a prototype of his character. In the home version, an extra character named "Siegfried!" was added as an unlockable character. "Siegfried!" was an alternate version of normal Siegfried taken from his no-input ending, where he was consumed by Soul Edge. This early version was much different from the former Nightmare, having crimson armour and a more flesh-like design, almost as if he were part of Soul Edge itself. He has no story nor ending, and only used Siegfried's Soul Edge without effects.
In video games
Soulcalibur Legends, which takes place between Soul Edge and Soulcalibur, presents Nightmare as a boss fight. When Siegfried attempts to reject Soul Edge's power, Inferno emerges and takes on Nightmare's shape to stop him. After the credits, there is a short sequence showing the true Nightmare (or at least his foot) and Soul Edge Male.
Allying himself with Astaroth, Ivy, and Lizardman in the city of Ostrheinsburg, Nightmare attempted to completely restore Soul Edge. However, when his allies came under attack and either defeated or abandoned him, and he himself was beaten by Kilik, owner of both the sacred staff Kali-Yuga and sacred mirror Dvapara-Yuga; and Xianghua who wielded Soul Edge's antithesis Soul Calibur. As a result, Soul Edge's control was broken, and he realized it was he who killed his father, as well as all the sins he had committed for the sword. Knowing the sword should never fall into humanity’s hands again, Siegfried hid himself and Soul Edge, attempting to keep it far away from civilization.
By Soulcalibur II, the balance between the restored Soul Edge and Siegfried was broken, and Soul Edge was able to take over Siegfried's mind. At first it was for short periods of time during his sleep, but eventually he took Siegfried's body completely and used him to cause destruction once more. Raphael Sorel, a French former-nobleman pursuing the blade for his own scheme, challenged Nightmare and was completely defeated, but managed to pierce Soul Edge's eye with his rapier in one final attack. The sword now in agony lost control over Siegfried, and allowed him to defeat Inferno and break free once again. Siegfried then discovered Soul Calibur, released from Inferno's body after its defeat, and impaled Soul Edge's eye with it. Both swords sealed, Siegfried abandoned his old armour and left with them.
In Soulcalibur III, Zasalamel revived "Nightmare" in essence. Created as an avatar for a disembodied Inferno using the original armour as a shell, he pursued and eventually recovered his true body, Soul Edge. Nightmare also met Tira, who became his servant and manipulated others into protecting Soul Edge and sacrificing souls for Nightmare, to eventually become sacrifices themselves. Meanwhile Zasalamel manipulated Siegfried, leading him to Nightmare, and wielding Soul Calibur, he clashed against Soul Edge. At the moment the swords struck a burst of energy was released; Siegfried was mortally wounded, while Soul Edge and its body were pulled into a warped dimension, eventually returning to Ostrheinsburg.
In Soulcalibur IV, Soul Calibur revived Siegfried, while Inferno restored Soul Edge fully and strengthened his hold over the animated armour that was Nightmare. Inferno then claimed the entire city of Ostrheinsburg as a vessel due to the fact that Nightmare lacked the capacity to contain his consciousness, and as a result, the city became cursed and many of its inhabitants were corrupted. Tira continued serving Nightmare and manipulating Astaroth, Sophitia and others into serving Soul Edge, in order to weaken Soul Calibur and provide Nightmare with the strength necessary to destroy the spirit sword. Nightmare would then clash against Siegfried in a final duel, though his plans were interfered with the appearance of Algol and the Tower of Remembrance.
As revealed in Soulcalibur V, Soul Edge shattered with Nightmare ceasing to be during his final duel with Siegfried. However, the blade regained consciousness with what little pieces of it were found and collected by its servants; allowing Nightmare to gain a new body and assume the alias of Graf Dumas. From there, Dumas worked his way into the grace of the Holy Roman Emperor Rudolf II to be awarded the Kingdom of Hungary, exploiting the war with the Ottomans to initiate a widespread hunt and massacre of the malfested to find the remaining fragments and completely restore Soul Edge to its former glory.
In 2000 Epoch C-Works released a series of action figures based upon the original Soulcalibur, amongst them Nightmare. The semi-posable figure came with equipable weapons from the title in the same package. In August 2003, Todd McFarlane Productions released a Nightmare sculpture amongst a set of five based on characters from Soulcalibur II. The immobile figure was modelled after his primary outfit and stood six inches tall with a base.
Nightmare has received praise both as an aspect of Siegfried and as a series villain, and has been described as "one of the most memorable fighting-game villains in history." The New York Times noted his size and appearance alongside Astaroth's as standouts in the series, adding "they offer characters made for the sort of player who would have preferred Sonny Liston to Muhammad Ali, or Shaquille O'Neal to Michael Jordan." Others have been critical of the character's strength, such as JIVE Magazine which described him as one of several "total crutches for mediocre players" in Soulcalibur II.
In a 2002 poll by Namco prior to the release of Soulcalibur II regarding their favourite character, Siegfried placed ninth with 2.5% of the tally, tied with Mitsurugi. Nightmare placed first in UGO.com's "Top 11 SoulCalibur Fighters" article, with the writers statement "Was there ever really any question? Not for us..." and praise for his strength and role as a "badass, playable villain." IGN listed him as a character they wished to see in Super Smash Bros. Brawl as a playable guest villain, though noted he was also "too extreme" for the series. In a later article on the Soul series itself, they noted "a Soul game simply feels incomplete without an appearance by the warring personalities of Siegfried and Nightmare", and praised the contrast between Siegfried's angelic figure and Nightmare's demonic form.