In Perfect State each person is in their own version of the matrix but they know about it. The computer generated world adapts to them as they live their lives. The worlds can be anything from a modern setting, to a fantasy realm with magic, or super futuristic high tech.
In the end the human race is basically brains in jars. They've generally come to terms with it.
The really interesting parts occur when these humans interact with people from other "states". Essentially people from other matrixes. Someone who has lived their entire life in a realm of magic can suddenly find themselves dealing with future tech and robots. It's a very interesting culture clash.
Since it's a novella it's a quick read. I listened to it on Audible and it was about a 3 hour listen.
Perfect State is the best novella I've read in the past year. I highly recommend it.