Objective reality is contained within subjective reality, just like a video game runs inside a computer. The objective world perceived by your senses is the simulation -- the game -- within the larger box. Why create the simulation? Because it has the potential to be an absolutely fascinating growth experience. Your lower, objective self may not always perceive it that way, but your higher, subjective self is soaking it all up. And ultimately all these physical beings walking around are part of the same higher self.
My understanding is that by objectifying aspects of itself and allowing those parts to interact, the higher self gets to experience contents of its own being in a whole new way.