My Lightmatter key reports I needs another game before I can activate it.

The Lightmatter key you have received does indeed need the Free Lightmatter to be activated on your Steam account before this will work. 

Please visit: https://store.steampowered.com/app/994140/Lightmatter/ and activate the Free Basegame to your Steam account before you use your Fanatical.com Lightmatter key.

I hope this helps.