The way i explain it is that i love a challenge. I want to test my self and my skills against other people and that requires some sort of conflict, real or imaginary. It could easily have been sports (the conflict being that both teams are trying to achieve the goal of more points than the other) but it ended up being video games. The easiest way to create conflict in games is to say that these guys are trying to kill you and you're trying to kill them. I think the reason that violence is most common is that when your life is on the line, you would do anything you could to save your self (statement not to be taken to literally). When you kill someone, you know that they were holding nothing back, and so you have just indisputably proven your superiority.
Obviously if we want to become a peaceful society we can't exactly be holding gladiator matches in our backyards, and death is a bit more permanent IRL. So we end up playing games that simulate conflict instead. Oh and this guy said it well so i'll just quote him.
badgersprite said:
Certain types of violence, like martial arts or chivalric, medieval fantasy, or even soldiers in our armed forces have a sense of idealised honour, glory and heroism attached to them. We don't have any desire to go and do these things in real life, but we're brought up to idolise people who do fight and engage in violence in certain circumstances. Superheroes, for example, or Power Rangers. I don't think of these shows as particularly violent, but I can't say there isn't a huge part of me that just geeks out when I get to play some kind of ancient warrior or ninja or superhero. Completely separate from real life, but still something that's kind of ingrained in our culture.
One more thing though, I think it's part of human nature to be violent. Up until very recent human history we always had to kill for our food and fight with each other over resources. Aggression was advantageous back then but not so much now. Now violence is largely unnecessary, but we still have violent tendencies. Simulated violence could help to satisfy those tendencies, keeping them from being bottled up until we can't contain them any more.
Also with the recent feminist movement there is no longer any need to fight amongst ourselves over women. Girls now often make it very clear if they're interested in you or not, and if not then you really don't have much of a chance against that guy she is interested in. So basically there are very few things left to fight over but we're still left with these violent tendencies.