The Metaverse and AI could eventually become so advanced, that simulated warfare could replace conventional warfare, where nations could settle their differences without any real bloodshed. amirite?

How are you so sure that's not already happening

That was the idea behind the Olympics: to let nations compete in sports instead of killing each other.

Somehow, it didn't turn out that way.

War is almost always about land and resources, not "settling differences". Bloodshed is just a means to an end.

Would the loser of the simulated war just hand over their land and resources? Or would they think "No, we want to keep it. If you want it you'll have to take it from us"?

Don't think any countries with an actual military will go for that. If that was a feasible idea they'd have already found some kind of alternative like playing cards or call of duty or something.

Someone never took a history of warfare class. And it's OP.