Yume Nikki:Monochrome

Madotsuki in the monochromatic White Desert

Many things in Yume Nikki are monochromatic. What this represents, like much of the rest of the game, is up to interpretation.

The White Desert and all its inhabitants are monochromatic, as is Masada and his spaceship.

Fan Speculation

One possible interpretation for the monochrome scheme is that is symbolizes past events, much like how we use greyscale to symbolize something in the past nowadays. The occasional red bits found in these black-and-white areas are meant to draw attention to a certain thing.