Part of the argument is that you can only know what you experience. But, if this is a simulation, "you" could be a program running on a computer and your every experience is just piped directly into your consciousness without any underlying physical reality. You might even not be interacting with other people in the simulation, it could be just you and everything else is simulated without being similar to whatever existence you have.
I don't agree with this argument, but it circulates occasionally.
> "you" could be a program running on a computer
If you are in a sim, then the sim execution is an expensive process, it produces heat and consumes energy. If you are in reality, a material body, then keeping alive also consumes energy. The debates about consciousness often assume a cost-free regime, a platonic perspective. I think this is wrong. We have much to gain thinking about how a process provides its own energy, or how it balances costs and gains. Maybe we can find answers about consciousness too if we chase down the cost recursion path.