Let me answer with what I think right away. To me, this is not one of those yes-or-no questions because it's impossible to tell. Simply put, the theory behind the question is most likely unprovable. Not from the inside anyway. 'Simulation Hypothesis' and the phrase 'Non Playable Characters' are concepts relatively new, born not that long ago, when digital computing came to be fast enough to produce graphically demanding multi-player games sophisticated enough to hint at this question and the probability that we might also be inside one of those simulations. And to dispute the question about the nature of reality is quite useless, because everything that surrounds us, no matter how strange we think it is, can also be real and not part of the code. Even if our reality were simulated, its origin would be extremely difficult, if not impossible, to prove. By design, nothing inside the simulation could be able to see the lines of the code, only the outcome of its work. In order to say that we are all NPCs, something extraordinary has to happen. Something unexpected, like a bug in the code. A glitch that would clearly break the laws of physics.
On the other end, in the future, near or far, the engine behind simulated characters in games would be even more sophisticated in a way that all characters will be able to easily pass Turing's test. To act just like you and me. The AI behind them would be so advanced that they would be equal to the human players. Or much better. So to speak, one game in particular has already achieved this goal. The Chess. When asked about chess engines, Magnus Carlsen, the current world champion, said exactly this: "I find it much more interesting to play humans. And also, of course, now that they have become so strong in a game like that, I wouldn't stand a chance". I love chess, but I have to admit I disagree with Magnus - playing against computer bots became more and more indistinguishable from playing real people. In the most popular chess.com engine online, I solely play against computer personalities behind Komodo and Stockfish engines, and I enjoy them for years. But I agree that playing against humans is much more fun. For now. Let's revive this talk again in a decade or two... Or three.. When chess bots develop more to their personalities. More non-chess features. A sense of humor, maybe.
In any case, the main problem with simulation theory is that it lacks a definition of reality itself. What it really is. Is this what we are living in? If it is simulated, where is it simulated from? If we skip all the philosophical views so far solely based on Nick Bostrom's book 'Are You Living in a Computer Simulation?' and stay to the physics realm only, I think that simulation of any reality or anything at all requires two prerequisite conditions to start with. One is that there is a high probability that the system performing the simulation should be distinct from its simulation, and the second is a large complexity behind it, something that Jonathan Bartlett from the Blyth Institute explained with: "The problem with that [simulation in general] is that it always takes more stuff to simulate something than the thing you’re simulating".
Additionally, we are, kind of, looking at the simulation hypothesis through the gaming lenses today, in which simulated reality must have 'real' players from the original coder's reality. But what if our reality, if being simulated, is not a multi-player game? What if it is a zero-player game? Or not a game at all? In that case, we all could be NPCs, and there would be no real players. Because original and simulated reality could be two completely incompatible actualities. What if simulated reality is not a computer program at all? What if it is something else entirely?
I know I post a lot of questions here, but bear with me. If we follow the logic of more complex, upper reality, which is distinct enough from its simulated creation, what would I think of first? For me, it's shadows in Plato's 'Allegory of the Cave'. In his famous work, Plato describes a group of people who are chained to the cave facing a blank wall. All they saw were shadows projected on the wall from objects passing in front of a fire behind them. The shadows are the prisoners' entire reality, while the objects before the fire represent the true forms of the items that they can only perceive through reason. Plato goes further elaborating his mind experiment, but for our topic, let's focus on the shadows themselves. They are just two-dimensional images of something coming from the upper third dimension. They are distinct from the original objects and certainly less complex and the product of a comprehensive setup.
Well, the final question arises by itself. Is it possible to cast three-dimensional shadows of four-dimensional objects? Just like a square represents a cube from the third dimension, the cube could be just a shadow of a tesseract's fourth-dimensional counterpart. The casting in this scenario would not be as simple as in Plato's story, nor the shadows would be what we mean by the term, but it's definitely something worth giving a second thought. One hypothetical four-dimensional reality would be an ideal source of three-dimensional simulations, and there's even a scientific theory that 'casts' a light in the right direction. It's called the 'Holographic principle'.
The origin of the theory lies in black holes, and the best is to quote my fictional self from the 'Revelation of Life', a hard science short story I wrote a couple of years ago: "If Hawking was right, any black hole, no matter how massive, would evaporate over time. When that happens, all the information swallowed inside would be lost. The problem is that quantum dynamics is clear about it—nothing, especially information, can ever be lost." The solution to this paradox is that the information belonging to the objects swallowed by the black hole should not be part of the three-dimensional reality in the first place. The holographic principle states that "the description of a volume of space can be thought of as encoded on a boundary to the region" or the dimensional boundary surrounding the entire universe, while our familiar space-time continuum might be just a (holographic) projection of the entities and events located outside.
Finally, and to get back to the original titled question, in this reflection we indeed could be all NPCs in a hypothetical simulation originated from the upper dimension. Just like in a famous Zero-Player game invented by John Horton Conway, a mathematician from Princeton University, a simulated three-dimensional world can only be a setup, created with an initial state and left to evolve on its own. Just like we culture bacterial colonies in a Petri dish. Or it can be a more complex setup with added life forms driven by conscious artificial entities or even by 'real' people from the upper dimension. For the question why would such a simulation be created in the first place, there is no good answer. The reality of a fourth (or fifth, sixth, etc) dimension would be something we couldn't be able to fathom right away. Or at all. Nevertheless, I thought about one simple reason and embedded it in the 'Revelation of Life', but if you are eager to read it, please watch a 'Game of Life' first, a short film that precedes it.
Game of Life (Simulation story, prequel)
https://www.mpj.one/2016/08/game-of-life.html
Revelation of Life (Simulation story, a hard science fiction)
https://www.mpj.one/2020/10/revelation-of-life-part-one.html
Refs:
https://builtin.com/hardware/simulation-theory
https://mindmatters.ai/2021/01/jonathan-bartlett-on-why-we-do-not-live-in-a-simulated-universe/
https://chesspulse.com/is-magnus-carlsen-better-than-a-computer-2/
https://www.chess.com/terms/chess-engine
https://medium.com/@jacksimmonds89/are-you-an-npc-this-may-disturb-you
https://en.wikipedia.org/wiki/Simulation_hypothesis
https://en.wikipedia.org/wiki/Holographic_principle
Image ref:
https://www.imdb.com/title/tt0139809/
On the other end, in the future, near or far, the engine behind simulated characters in games would be even more sophisticated in a way that all characters will be able to easily pass Turing's test. To act just like you and me. The AI behind them would be so advanced that they would be equal to the human players. Or much better. So to speak, one game in particular has already achieved this goal. The Chess. When asked about chess engines, Magnus Carlsen, the current world champion, said exactly this: "I find it much more interesting to play humans. And also, of course, now that they have become so strong in a game like that, I wouldn't stand a chance". I love chess, but I have to admit I disagree with Magnus - playing against computer bots became more and more indistinguishable from playing real people. In the most popular chess.com engine online, I solely play against computer personalities behind Komodo and Stockfish engines, and I enjoy them for years. But I agree that playing against humans is much more fun. For now. Let's revive this talk again in a decade or two... Or three.. When chess bots develop more to their personalities. More non-chess features. A sense of humor, maybe.
In any case, the main problem with simulation theory is that it lacks a definition of reality itself. What it really is. Is this what we are living in? If it is simulated, where is it simulated from? If we skip all the philosophical views so far solely based on Nick Bostrom's book 'Are You Living in a Computer Simulation?' and stay to the physics realm only, I think that simulation of any reality or anything at all requires two prerequisite conditions to start with. One is that there is a high probability that the system performing the simulation should be distinct from its simulation, and the second is a large complexity behind it, something that Jonathan Bartlett from the Blyth Institute explained with: "The problem with that [simulation in general] is that it always takes more stuff to simulate something than the thing you’re simulating".
Additionally, we are, kind of, looking at the simulation hypothesis through the gaming lenses today, in which simulated reality must have 'real' players from the original coder's reality. But what if our reality, if being simulated, is not a multi-player game? What if it is a zero-player game? Or not a game at all? In that case, we all could be NPCs, and there would be no real players. Because original and simulated reality could be two completely incompatible actualities. What if simulated reality is not a computer program at all? What if it is something else entirely?
I know I post a lot of questions here, but bear with me. If we follow the logic of more complex, upper reality, which is distinct enough from its simulated creation, what would I think of first? For me, it's shadows in Plato's 'Allegory of the Cave'. In his famous work, Plato describes a group of people who are chained to the cave facing a blank wall. All they saw were shadows projected on the wall from objects passing in front of a fire behind them. The shadows are the prisoners' entire reality, while the objects before the fire represent the true forms of the items that they can only perceive through reason. Plato goes further elaborating his mind experiment, but for our topic, let's focus on the shadows themselves. They are just two-dimensional images of something coming from the upper third dimension. They are distinct from the original objects and certainly less complex and the product of a comprehensive setup.
Well, the final question arises by itself. Is it possible to cast three-dimensional shadows of four-dimensional objects? Just like a square represents a cube from the third dimension, the cube could be just a shadow of a tesseract's fourth-dimensional counterpart. The casting in this scenario would not be as simple as in Plato's story, nor the shadows would be what we mean by the term, but it's definitely something worth giving a second thought. One hypothetical four-dimensional reality would be an ideal source of three-dimensional simulations, and there's even a scientific theory that 'casts' a light in the right direction. It's called the 'Holographic principle'.
The origin of the theory lies in black holes, and the best is to quote my fictional self from the 'Revelation of Life', a hard science short story I wrote a couple of years ago: "If Hawking was right, any black hole, no matter how massive, would evaporate over time. When that happens, all the information swallowed inside would be lost. The problem is that quantum dynamics is clear about it—nothing, especially information, can ever be lost." The solution to this paradox is that the information belonging to the objects swallowed by the black hole should not be part of the three-dimensional reality in the first place. The holographic principle states that "the description of a volume of space can be thought of as encoded on a boundary to the region" or the dimensional boundary surrounding the entire universe, while our familiar space-time continuum might be just a (holographic) projection of the entities and events located outside.
Finally, and to get back to the original titled question, in this reflection we indeed could be all NPCs in a hypothetical simulation originated from the upper dimension. Just like in a famous Zero-Player game invented by John Horton Conway, a mathematician from Princeton University, a simulated three-dimensional world can only be a setup, created with an initial state and left to evolve on its own. Just like we culture bacterial colonies in a Petri dish. Or it can be a more complex setup with added life forms driven by conscious artificial entities or even by 'real' people from the upper dimension. For the question why would such a simulation be created in the first place, there is no good answer. The reality of a fourth (or fifth, sixth, etc) dimension would be something we couldn't be able to fathom right away. Or at all. Nevertheless, I thought about one simple reason and embedded it in the 'Revelation of Life', but if you are eager to read it, please watch a 'Game of Life' first, a short film that precedes it.
Game of Life (Simulation story, prequel)
https://www.mpj.one/2016/08/game-of-life.html
Revelation of Life (Simulation story, a hard science fiction)
https://www.mpj.one/2020/10/revelation-of-life-part-one.html
Refs:
https://builtin.com/hardware/simulation-theory
https://mindmatters.ai/2021/01/jonathan-bartlett-on-why-we-do-not-live-in-a-simulated-universe/
https://chesspulse.com/is-magnus-carlsen-better-than-a-computer-2/
https://www.chess.com/terms/chess-engine
https://medium.com/@jacksimmonds89/are-you-an-npc-this-may-disturb-you
https://en.wikipedia.org/wiki/Simulation_hypothesis
https://en.wikipedia.org/wiki/Holographic_principle
Image ref:
https://www.imdb.com/title/tt0139809/