Funny

Its actually entirely normal for people to 'see things that aren't there' in the corners of your vision, especially in poor lighting conditions.

Your eyes and brain are best at resolving detail of things you're looking directly at, and basically the brain does a best guess pattern match for things on the periphery... because sometimes, its just a bug or a leaf or just a weird trick of the light... but other times, its a fucking stealthy predator animal.

As to video game ... entities appearing in dreams, or just... dreaming you are in a video game... yeah I've had that happen too.

It seems to be easier for a dreaming brain to just either mix the virtual world and real world together, I guess like AR... or just throw you totally in to a simulated world... than it would be to dream of yourself as still being you, sitting in a chair, in front of a screen, and keep the clear distinction between the real world and the digital.

Again I think the commonity here is that when a system of abstractions and symbols only makes any sense when it is stable and coherent... a dreaming brain does not really handle well a highly specific and complex rule set: it either blurs them together, simplifies them massively, or just doesn't include them.

EDIT:

But yeah, if you use a phone as mostly a map and compass... thats not too conceptually complicated, if you limit it to just that. Of course I'd be surprised if the... fidelity, the detail of the map and compass were high, but they probably don't need to be if most of the dream if like, you hiking around looking for geocaches or w/e.

Theres a whole lot more visceral, more real elements to that experience that are probably gonna get more ... dream fidelity focus? on? The environment, the difficulty of moving through terrain, the beauty or terror, maybe the elation of finding the thing, the determination that keeps you going, the fear of running out of food or maybe having to shelter in place from a sudden onset storm...