Simulating a Witcher 2 save means that you get to decide how several key events played out in The Witcher 2, and the consequences of these events can be seen in The Witcher 3. When starting a new game in The Witcher 3, the game will ask if you want to simulate a Witcher 2 save, and if you choose to do so, you will get some extra dialogue options a few hours into the game. These dialogue options cover important events from The Witcher 2 and allow you to shape how Geralts story unfolded prior to The Witcher 3. If you choose not to simulate a save, decisions will automatically be made for you, and these default options opt for the negative outcomes and will lock you out of a side quest.

In summary, simulating a Witcher 2 save in The Witcher 3 allows you to shape Geralts recent past to your liking and gives you some juicy dialogue options early in the game. It is recommended to simulate a Witcher 2 save, as it has an impact on the narrative and gameplay.