Our hero buys a machine that basically is sim-earth, sim-city, and the sims all in one. You start with a one dimensional universe, expand to two, three, create the big bang, and then watch things settle down. Eventually planets form, and life begins to evolve. Intelligence and civilizations develop, wars rage, religions rise and fall, all while he watches.
There is an empathy slider that controls how much he empathizes with life on the planet.
In this world a moral dilemma is whether it's moral or not to publish poetry written by simulated people in a world of your own creation.
He watches his civilization and their suffering. Eventually he finds a button (which was supposed to be disabled) for "total immersion", clicks it, and lives the life of one of his guys, but dies while still in the world.
I think the story is pretty old, 70s or earlier. I think it appeared in an anthology which contained another story about a world where the wind blew 500+ miles per hour, and when people would go outside they'd ride around in giant armored car-like things.