But the entire universe is rendered. Hubble and other telescopes prove it, and there's no apparent loss in precision of the laws of physics as you observe more distant objects.
Edit: Perhaps it's adaptive and only simulates what will be observed. And if some cost saving optimization artifacts are discovered within the sim, it can be fixed and reverted to a earlier state.
Edit2: Perhaps it only has to simulate from your perspective, but the more you critically observe and interact, the more expensive the simulation is.
New life goal: be as difficult to simulate as possible ;-)