Fall of Insomnia is a major event in Kingsglaive: Final Fantasy XV that happens during the mandatory stay at Galdin Quay during Chapter 1 of Final Fantasy XV. The battle occurs after Niflheim Empire opens fire after a fake peace treaty signing, their goal to access the Lucian Crystal as part of its bid for world domination. The Crown City of Insomnia is protected by a magical barrier known as the Wall that has protected it from imperial aggression for decades.
The empire had attempted a prior attack on Founder's Day of M.E. 734 via the Adagium, whose true identity is the imperial chancellor Ardyn Izunia. Ardyn, working together with imperial researcher Verstael Besithia, was dispatched to disable Insomnia's Wall amplifiers, but although this weakened the Wall, it wasn't sufficient to breach Lucis's defenses. Izunia also defied withdrawal orders to force King Regis to summon the spirit of Ardyn's brother, the Founder King Somnus Lucis Caelum. Ardyn ultimately disappeared due to divine intervention. Because of this setback, Niflheim was forced to concoct another strategy.
Izunia manipulates the emperor to thirst for the Crystal of Lucis, and Deputy High Commander Ravus Nox Fleuret, who begrudges Lucis and its king, pushes for the empire to invade. Verstael develops new weapons in wait for the invasion effort, the monstrous Diamond Weapon magitek armor.
May 16, M.E. 756 Niflheim requests a peace treaty to halt hostilities, with Chancellor Izunia and Emperor Aldercapt personally overseeing the treaty-signing. Chancellor Izunia travels to Insomnia to deliver the empire's terms of peace: for all lands outside the Crown City to be annexed to the empire, and for the Lucian crown prince to wed Princess Lunafreya of the imperial province of Tenebrae. King Regis notes that Niflheim must be very bold to dispatch the chancellor to act as their envoy without an escort.
In reality, the request is a feint to have Niflheim's magitek infantry infiltrate the Crown City and steal the Crystal powering the Wall using information provided by Lucian rebels. One of these rebels is General Glauca, the alter ego of Titus Drautos, the commander of Lucis's royal guard, the Kingsglaive, and several Glaives defect to Niflheim. King Regis suspects the treaty to be a trap, but allows it to happen due to being unable to maintain the Wall for much longer. To protect his son and the fate of the world, Regis sends Prince Noctis away from the city prior to the treaty-signing, supposedly to his wedding to Lunafreya.
A grand party is held atop the Caelum Via hotel to welcome the imperials to Insomnia. Among the attendees is Princess Lunafreya whom the emperor has brought to the treaty-signing. She is abducted by Niflheim and imprisoned inside an imperial dreadnought hidden in the outlands, but she is rescued by Nyx Ulric, a Glaive still loyal to the Crown.
Lunafreya and Nyx rush back to the Crown City where the treaty-signing is to take place to save King Regis, but fighting breaks out within the Citadel as both the imperials and the Lucians draw their weapons. King Regis holds back some of the assault with magic, but the Wall falls as the Crystal is stolen and the Ring of the Lucii Regis uses to channel the Crystal's power is severed from his hand, although it returns to his possession. Imperial forces stationed outside the city attack Insomnia.
Regis attempts to fight off Glauca, but is killed after allowing Nyx and Lunafreya escape with the Ring of the Lucii, his final request being for her to pass it onto his son, Prince Noctis. Nyx dons the ring to stop Glauca and animates the Old Wall to repel the assault by imperial Diamond Weapons. Lunafreya evacuates. Some of the surviving Crownsguard members, Cor Leonis, Monica Elshett and Dustin Ackers, help evacuate several Lucians from Insomnia during the attack, including Iris Amicitia.
Aldercapt and Izunia leave the city with the Crystal. The attack makes headlines the next day and the radio news broadcast that the king, the crown prince and Lunafreya have all perished. In actuality, King Regis had sent his son away prior the attack, knowing Noctis is the prophesied True King who will bring the world to light.
The empire blockades Insomnia and sets up a provisional government there, promising to repatriate those who had fled the fighting. In the wake of General Glauca's death Ravus is promoted as the highest ranking military official. Ravus had lost his arm when attempting to gain the power of the Ring of the Lucii, and is outfitted with a magitek prosthetic. He had plundered King Regis's sword from his body and now keeps it on his person.
The world mourns for Lunafreya's death and sylleblossoms are set up as memorial for her. The empire begins to occupy the towns on the outlands of Lucis.
When Noctis hears the news he attempts to return to Insomnia, but finds passage there impossible. Cor contacts Noctis and confirms Regis's death. When Iris reconvenes with Noctis and his group, she explains Insomnia's outer perimeter was largely spared, but the inner city took massive casualties.
Niflheim's rebuilding efforts on Insomnia are abandoned at the onset of the long night when the empire falls apart. Insomnia is left in ruin and becomes inhabited by daemons and rogue magitek troopers, though the reconstructed Kingsglaive try to take hold of it knowing that the King of Light is to return soon to fulfill the prophecy.
It is revealed that Izunia had personal motives for conducting the attack on Insomnia, as it served his agenda of ending the Lucis Caelum line as his revenge. When confronting Noctis ten years later in the Citadel's ruins, Izunia alludes to the fall of Insomnia, and in particular Regis's death, citing that during that time, Noctis had been "out playing with [his] friends."