Long before ‘The Matrix’ (the movie) was released in 1999, there were a number of other books and movies about people living virtual lives in virtual worlds. A couple of months ago I was recommended to watch ‘Die Welt Am Draht‘ (link to Wikipedia in German and English). A 1973 movie by Rainer Werner Fassbinder, available on Youtube (see here for a trailer with English subtitles), it is about worlds simulated in computers occupied by conscious beings that are unaware that they are just a simulation. Well, that is, all except a few and those that are, are quite unable to deal with their knowledge. Sounds very much like Matrix but 25 years earlier! The movie is based on the book Simulacron-3, written in 1964 by Daniel F. Galouye and seems to be quite faithful to the book’s original story.
Think about it: The book was published in 1964, a time when microprocessors on a chip did not yet exist and computes were large mainframes in companies and universities, seen and used by few and operated by even fewer. With a few kilobytes of memory and screens/keyboards not yet available to interact with a computer, it must have taken quite some imagination to make the jump from what computers were then to the idea that they could one day become powerful enough to simulate worlds and produce consciousness.
Highly recommended to watch!