Ah, but how do you know the simulation doesn't just slow down the simulated flow of time so it can keep up? Think of a bullet-time like concept. The universe can be simulated as fast as the underlying hardware can keep up.

Maybe the universe doesn't do it for the same reason games and movies don't do it, the people watching expect smooth playback.

But if you're enmeshed in the simulation, you would never notice the slowdown! The only reason the video game is annoying is because we experience time outside of it.

I think the OP is referring to people watching from outside the simulation.

Yeah, the crystal people.