The notion of fiction as virtual reality avant la lettre, through the experience of the reader's immersion and absorption, is a fascinating one, and might be traced throughout the history of literary theory. Hillis Miller's "On Literature" (2002) placed a strong emphasis on reading literature as an experience of virtual reality. One might also recall Georges Poulet's account of the experience of reading as a kind of invasion from another mind, providing an alien experience of another's world, or C.S. Lewis's "Experiment in Criticism" (1961) conception of literature as a way of losing oneself temporarily in the experience of another. Going way back further, I found this reflection by Polybius on the reading of history (not fiction, mind):
"I have recalled all this for the benefit of those who read history books. All men have two ways of improving themselves: either through what happens to themselves, or through what happens to others. The most effective method is that of personal experience, but the most innocuous one is that of alien experiences. That is why the first one must never be wilfully chosen, since education is achieved through great suffering and danger; one must always pursue the other, which allows us to see what is best without undergoing any harm. Whoever considers the matter from this perspective will conclude that the best education for the realities of life is the experience resulting from political history: it is the only thing which, without causing harm, produces in any situation and circumstance the best judges of what is best".
From Polybius' standpoint it would seem that it is reading that provides the experience of virtual reality. And of course it is also a defense of history (or perhaps realism) over fiction (and fantasy).
(This is a commentary on "Fiction Addiction" in The Storytelling Animal. The Polybius quotation is from Book I.35 of The Histories ).