A walking simulator is a type of video game which lacks many of the traditional aspects of a game (such as a goal, win/loss conditions, any kind of game system to interact with) despite taking the form of a video game. The phrase implies that there is basically nothing to do in the game other than walking around.
A: I sent you a new game on Steam, check it out.
B: Gone Home? That's not even a game, it's a walking simulator.