I am interested in what pain is, but I think the Biologists are still not quite done gathering evidence about it. Currently the opinion seems to be that insects are not aware of pain, that fish sense it like its itching of various intensity and that mammals, avians and reptiles feel pain. Those opinions may change as information gets integrated into the discipline and the consortiums deal with questions.If they are not sentient then they cannot suffer so it's morally permissible to do anything to them. I think if an entity is controlled by agorithms then that's one thing, but if it has a mind then that's another. But I think the issue is whether or not there is a capacity for suffering. If we think of Artificial Intelligence, I think the more sophisticated it is the better we should treat it, on the off-chance it has attained consciousness or even a soul - but how would we go about turning one physical stimulus into a qualia of pain? How would that work? But in short, I believe computer games as they are today are morally permissible.
My thought though is that since humans can learn to ignore and disbelieve pain it must be partly a matter of self awareness, some kind of survival mechanism, perhaps like a panic button in the mind. The fish feels itching not pain but still panics. The ant feels nothing but still panics. It aids them in battle and survival, but it helps us much less.
But how to appear as a higher consciousness to our simulations? Higher consciousness in our timeframe and gravity field and using any physical medium would require a lot of time to think, due to the immense data transfers required -- I think. There could be some slight of hand if you make yourself relatively faster. Put your simulator into orbit around a black hole where it will experience time much more slowly. The residents in the simulation will experience very little time compared to you. This will give you the ability to appear as a higher consciousness as you broadcast your thoughts to them, since you will have a realatively much longer time to think. Ten thousand years for you will seem to them like minutes. Anyway you might want to watch some Isaac Arthur on youtube. Hes got videos about farming black holes and the effects of gravity on time.I accept all these points as valid - I am beginning to suspect that the barrier between our dimension and the outside world (and maybe other dimensions) is more porous and fluid than it may at first seem. This I think is all interesting stuff. But I think it's hard to discern these relationships; I don't think our human minds - as they exist today - are really capable of comprehending all the different realities and how all different existences overlap and interplay. But I believe the elders do, to a much greater extent, on account of their higher consciousness and superior science.