Almost a solution to the Fermi Paradox, except it’s the Virtual Reality Trap https://warpcast.com/pmarca/0x9422843d
Both are unlikely in practice imo, because they make an N-of-N assumption. If even one culture can keep fertility rates high while others go low, it will end up dominating population-wise. If even one culture can continue to focus on the physical world while others go virtual, it will end up dominating militarily.
My background is in physics, so I want to offer a potential counter argument via statistical/thermodynamic principles. If the proliferation of VR/AR increase entropy at a rate faster than a lack thereof, both civilization and VR/AR will persist. If not, then VR/AR will fade and trend towards thermo equilibrium.