The online gaming market has been boosted by Microsoft's $1bn foray with the Xbox, and Sony's plans for an add-on to the PlayStation 2.
The pay-to-play version of The Matrix could make its debut as early as the end of this year, Yahoo and Variety reported.
Warner Bros wants a repeat of the success Sony has with EverQuest, an adventure game featuring a virtual kingdom.
The Matrix game will allow tens of thousands of people to play at the same time in a 3D world full of the futuristic locations found in the Keanu Reeves movie.
The movie itself portrayed a world which was in fact a computer-generated virtual reality used to control the minds of humans.
Its special effects were hailed as groundbreaking and were accompanied by kung fu battles created using elaborately choreographed wire work.
Monolith Productions and EON Entertainment, Matrix directors Larry and Andy Wachowski's production company, are said to be currently working on the game for Warner Bros.
Sequel hopes
The Matrix took more than $475m at the box office after its 1999 release.
The next two instalments, The Matrix: Reloaded and The Matrix: Revolutions, will be released next year.
Also featuring Keanu Reeves, Reloaded is expected to be a big box office hit.
More than 70 subscription-based multiplayer games are being prepared for launch on the internet, including Sony's Men in Black II: Crossfire and LucasArts' Star Wars: Galaxies.