So, if I understand this correctly...
There's a higher alien civilization that created Epsilon 9 as a computer simulation.
The Epsilon 9 civilization created Earth as a computer simulation.
People on Earth create their own computer simulations.
So the supreme alien civilization is watching the Epsilon 9 civilization watch the Earth civilization, as we sit at our computers and play Sid Meir's Civilization.
In conclusion, the supreme universal alien civilization is actually losers watching reality TV stars who watch reality TV?