That was the Wraith System. They really didn’t get into it, but since the Witch System didn’t work (because of Madoka’s wish), Kyubey created the Wraith System to collect energy. The mechanism still required magic girls, but we really don’t know where the wraiths come from… but knowing Kyubey, someone gets fucked over.
Here’s the crazy part… Kyubey was trying to create the Witch System in the rebooted universe, but couldn’t understand why magic girls didn’t turn into witches after their soul gems got dirty. They would just vanish (again, Madoka’s wish). Homura, being a total idiot, told Kyubey about the other universe and what happened there. She got all smug about it, and Kyubey just commented “that’s very interesting, there’s no way to prove it and you could just be making it all up, but that’s very interesting”. Sure, it was Madoka’s wish that reshaped the universe, but it was Kyubey who GRANTED that wish.
Don’t taunt the adorable immortal eldritch horror with godlike powers. :roll:
So now that Kyubey knows what was stopping his original plan, would he try to fix it (i.e. put the Witch System back in place)? Maybe the third movie is about that, since it seems like Madoka is restored somehow. Or maybe the Wraith System is WORST than the Witch System, since we don’t very much about how it works.