Mercedes posted this footage of Lewis Hamilton driving the Sepang circuit in their simulator. Now it doesn't have bleeding edge graphics but it looks pretty good considering and you would figure that the physics in Mercedes' simulator (or any other team's simulator for that matter) are as close to reality as possible.
What do they use for the framework for these simulators? I would assume that they have their own people in-house who build the simulations (physics, tracks, etc.) but do they license the graphics engine (or even basic physics) from a gaming company before inputting their own physics data? The graphics look good enough for me to think they don't do everything in-house.
It'd be fascinating to see how these things come together. I realize you wouldn't want your competitor getting access to your sim physics data, but wouldn't it be fantastic if they could sell that kind of info to game makers and improve the physics in the likes of Forza and Gran Turismo?