When Does Simulation Beat Reality?

For the past few years some people have been putting forward the idea that a possible answer to the Fermi paradox is that intelligent races retreat into simulated worlds and either die off or lose any interest in exploring the galaxy/making contact.

I think it's a pretty compelling idea. SEED just published an article on this and here are a few excerpts:

This is the Great Temptation for any technological species—to shape their subjective reality to provide the cues of survival and reproductive success without the substance. Most bright alien species probably go extinct gradually, allocating more time and resources to their pleasures, and less to their children. They eventually die out when the game behind all games—the Game of Life—says “Game Over; you are out of lives and you forgot to reproduce.”

I don't doubt this could happen to humans or any hypothetical ETs that might be out there, but what it doesn't explain to me is why we haven't seen evidence of sentient, self-improving machines scouring the galaxy for resources. Then again, maybe there isn't any reason why machine intelligence wouldn't want to make it's own retreat into the subjective.