Anyway, your objection here isn't actually relevant as far as I can tell. It's a probabilistic argument about the number of real minds vs. the number of simulated minds, and the bulk of the "proof" is in demonstrating that, under certain assumptions, the number of simulated minds would be so high in comparison to the number of real minds that you'd almost be forced to conclude that you are simulated.
It really doesn't have anything to do with "universes inside universes."
...and the main flaw of this still remains: we don't know the probabilities of a very advanced civilization running a simulation because we can have no idea of whether this would be interesting for them to do, we can't predict what would their goals and motivations be. Out great-great-...-great-grandchildren will not just be super-smart versions of us, they will have concepts and goals we cannot even imagine! A simulation of us, depressing as it may be to think it this way, would be just as interesting for them as an ant-farm to a little boy - he'd get bored of it quickly because he's as far away evolutionary speaking from ants as these super-iteligent beings would be from us, and that wouldn't make for a large number of ant-farms simply because ant-farms will be boring and useless...
my bad, I actually read it some time ago, after someone sent me a "summary" of the reasoning, omitting this variant, but somehow the "summary" was stuck in my head and not the actual paper. indeed, Nick Bostrom actually thought everything through, including this line of thought.
The objection is totally relevant because you cannot calculate probabilities if you don't know the number of real universes, the probability of life arising from non-life, etc. I would argue, using that line of reasoning that it is more likely that we would be a dream of a sentient entity rather than a simulation of one if his probabilistic assumptions are taken as probable.
Dreams only last a few hours, so that's not really a possibility. If you are proposing we are the "dreams" of a sentient and extremely advanced machine, then that is hardly different from saying that we are just simulated.
And I'm pretty sure the numbers you mentioned--like the number of real universes, the probability of life arising from non-life--really don't come into it at all. Skimming over the paper, none of that stuff seems to come up at all. Again, this isn't about universes inside universes (the news article phrased the argument poorly).
Im not talking about universes within universes. Let's take our own universe as an example, and using probability as we know it in our own as holding in whatever 'real' universe(s) that may or may not simulate itself or some subset of itself. If sentient beings evolve (taking Bostroms postulate of that probability as reasonably high) and assuming they 'dream' if they are anything like us, as he does, and since we have (yet) to develop a technology that can simulate a universe as complex as ours, it's far more probable that sentients evolve and dream universes than evolve and simulate us. Even in our own "existence" (whatever that means) you have to agree that there have been far more dreams than games played. This follows probabilistically; not all people play games but almost every human that has ever lived has dreamed. Therefore it is far more probable that we are a dream, or passing thought, for that matter, than an intended simulation. Hinduism win.
http://www.simulation-argument.com/simulation.pdf
Anyway, your objection here isn't actually relevant as far as I can tell. It's a probabilistic argument about the number of real minds vs. the number of simulated minds, and the bulk of the "proof" is in demonstrating that, under certain assumptions, the number of simulated minds would be so high in comparison to the number of real minds that you'd almost be forced to conclude that you are simulated.
It really doesn't have anything to do with "universes inside universes."