The reason that The Matrix was placed in 1999 was because the previous ones had failed... The Machines needed humans to accept the virtual world rather than the real world, which I will explain in detail later.
There were two previous version as far as we know.
The first was the Paradise Matrix, which human minds rejected.
The first Matrix (known as the Paradise Matrix) was designed to be a
perfect human world, where none would suffer and everyone would be
happy. It was supposedly a utopic realm where's one's desires, namely
the mind connected to it, would manifest. However, human minds could
not accept this concept, and scores of humans rejected the program.
The second was the "Nightmare Matrix"
A second Matrix (known as the Nightmare Matrix) was created. This
time, the Architect didn't try to make a perfect world, but one based
on human history, "to more accurately reflect the varying
grotesqueries of your nature". This time, the Architect inserted a
primitive cause and effect option into the virtual world.
This one was a failure because it didn't resemble close enough to the real world.
If the Merovingian's chateau and artifacts are any indication, while
the second Matrix beta was designed to more closely resemble real
human history, it somewhat resembled a stilted soap opera or B-horror
movie. Instead of a fluffy and soft "Paradise" like the previous
version, the Nightmare Matrix was populated with various "Monsters"
such as vampires and werewolves. Humans within this Matrix did now
operate within a framework of cause and effect, but didn't have true
choice, so much as acting out these scripts. Human minds within the
second Matrix beta could still discern on a certain level that it
wasn't real. While it wasn't the catastrophic failure of the first
Matrix beta, the second Matrix beta was still ultimately deemed to be
The final version is the Modern 1999 version we see in the film... It was made more realistic than the previous two where human civilization was at its peak:
"As I was saying, she stumbled upon a solution where nearly 99% of all
test subject accepted the program as long as they were given a choice,
even if they were only aware of the choice at a near-unconscious
level." The Architect to Neo
Architect redesigned the Matrix into its third and final form, a
realistic world approximating human civilization at its peak, circa
1980 - 2025, right before human started developing Artificial
Intelligences that became the Machines.