Simulation video games aim to create play around closely simulated real-world activities. This could be a battlefield, landscape, motor racing, farming, flying or just a kitchen.
The novelty is that you are not only playing a game but interacting with complex systems modelling the real-world in some way. This opens the door for creative and inventive approaches to succeeding in the game. It also provides the player with an open-world in which to spend time simply experiencing the simulation.
Almost any game can offer a simulation experience as this can combine with most genres to skew gameplay in a more realistic and open direction. This can mean that players enjoy a particular game not because of the shooting or racing but because it's a chance to spend time in a simulated world or system they enjoy.
From an educational and experiential perspective, a simulation game offers an entirely new way to learn and understand the world. Rather than a cold or external understanding of how things work, this offers an embodied experience of a system as the player moves and interacts with the simulation from within.