Great article, and another synchronistic experience: whenever I am pondering something, often a very specific idea, I happen to then come across a chapter in a book or an article on Steve's blog that takes this very idea and expands it, almost as if to confirm it to me. To a point where I'm not even all that surprised anymore.
I was thinking about the videogame analogy today, not only as a fleeting thought; it's been floating around in my mind all day, and here is something I wrote earlier (before coming across the article):
... you will feel as if you were observing the body from above it, but at the same time you are also observing it from deep within it. When you meet people, go about your daily life and operate in the world, you are playing the world’s most interesting videogame, sitting in your inner living room and navigating your character through the environment. Being an observer of your sense perceptions instead of being lost in them.