Computer games are heavily based upon simulation, particularly the perceptual manifestations of game objects, their behaviour, the game space and/or environment, and systematic interactions between game elements. Established simulation techniques may be used for the design of the simulation level of a computer game. Methods from discrete event systems simulation include stochastically modeled simulation object arrival and service processes, queues of various kinds, networks interconnecting these elements, and response behaviours of simulation objects to queues, including balking, reneging, and jockeying. Simulation of physical game world characteristics involves continuous systems simulation of the motion and physical interactions of game objects based upon kinematics and dynamics, having a verisimilitude based upon sample (or simulation) rates (ie. frequency of time cycles) and quantisation accuracy (ie. the number of bits used to represent a continuous value, like a length, distance or mass).
In games, simulation extends to the simulation of cognitive and emotional states and behaviours of game characters. While this has been a general goal of AI research, in games the issue is one of achieving interesting aesthetic functions of game characters; hence games require what Mateas  refers to as expressive AI in addition to any concerns they may have with the simulation of general forms of decision making or emotional affects.
For game worlds, the simulation model may be a model of a system or world that is a fiction or fabrication. Some game systems are simulations of real physical systems (eg. flight simulators), but the simulative aspects of most games have rather arbitrary requirements for verisimilitude. For example, most interactive 3D games include the simulation of a three dimensional Newtonian world having a uniform gravitational field. Beyond that they may present a model of a fictional world and its contents for which the question of correspondence to any perceived external reality is mostly beside the point.
A game that is primarily a simulation may involve none of the repetitive goal-oriented activities characteristic of game play, there may be no obvious end state, other than the player getting bored, and they may have none of the specific predefined patterns in time or generative foundations for predefined temporal patterns (above the object level) characteristic of authored stories or narratives. Long-term time patterns that emerge over the course of running a simulation model can be completely different for different simulation runs, and may include time patterns that have never been anticipated by the designers of the model.
Design concerns at the simulation level of a computer game are focussed upon the smallest level of time scale in creating game dynamics; this is the level of the simulation tick, the discrete time increment corresponding with the time interval between successive graphical frames or frames of an animation sequence. This is not the level of game moves, but the level of the implementation of game moves. For example, a move may be to fire a missile, while the simulation level is concerned with determining where the projectile is within the game space at the time of a specific frame based upon its position in the previous frame together with its current velocity, mass and the simulated forces acting upon it. This is also the level at which design decisions regarding the representation of space are made, concerning issues such as the quantisation of space, or how continuous space is to be divided up for digital representation as a basis for determining, for example, where a moving character is at a specific time after receiving the command to walk to a specific goal point.
Since games are here being contrasted with stories and simulations, it is possible to work with what may appear to be a rather narrow definition of a game. Hence a game will be defined as follows:
A game is a goal-directed and competitive activity conducted within a framework of agreed rules.
This can be referred to as the ludic or ludological definition of game, the kind of definition at the base of traditional game theory. Note that this definition captures many features of the definitions considered by Juul , in particular encompassing Juul’s first three defining characteristics of games: rules, quantifiable outcomes and values assigned to those outcomes. The definition does not include Juul’s additional criteria of player effort, player attachment to outcomes, or negotiable (real-life) consequences. These latter criteria are issues of pragmatics that are independent of the internal formal system of the game and highly subject to external accidents of history and context. Our definition leads to the possibility of recognizing the formal system of a game at work where the players may not self-consciously regard their activity as playing a game (including, for example, the reference systems with themes noted by Klabbers, ). However, the discussion presented here is concerned with games as entertainment, and the particular entertainment form of the commercial computer game.
It is often said that learning to play a game involves learning the rules of the game (eg. ). However, the above definition does not require this. It does require that activity obeys the rules, and that players implicitly or explicitly agree to those rules. As Juul  notes, one of the advantages of computer games is that the machine enforces the rules, relieving the player from the need to know all of the rules in detail and supporting rule sets far too complex for purely manual operation. Manual game play requires learning the rules, computer game play does not.
The rules may include the specification of a valid game space, specification of the components used for play, turn protocols, valid moves and their conditions of validity; rules establish what as a player you can or cannot legally do, and what the consequences of actions may be within the game.