It might interest you to learn that the question of whether or not the Universe is a computer program is a real and legitimate field of scholarly interest in theoretical physics.
Personally I love the idea of such “ancestor simulations.” You see, there is no reason to assume that the people living in such an ancestor simulation would not eventually simulate their own ancestors, and so on down the line, creating nested “layers” of reality.
However, each successive iteration of the simulation must have fewer bits of information than its parent simulation, because it is, after all, only running on a computer, whereas the whole rest of the Universe continues to exist outside.
So it follows that, sooner or later, you must reach a layer of reality with really crappy graphics, populated entirely be people who think that this is perfectly natural and, presumably, every bit as awe-inspiring as we find the night sky.
Somehow, this thought makes me happy.