Imperative (especially Java-style OO-imperative) programming will just about always win over non-OO declarative programming in an analogy like that (i.e. a Simulation of a real world process) by nature of them being focused on step-by-step "world manipulation" (and object interaction in case of OO).

The value for FP comes from proper abstraction over these processes in functional terms, at which point they can be trivially implemented (few bugs, few iteration cycles to get right). This can probably be done for every problem space, question is at which the abstraction costs outweight the gain. Considering that FP becomes more and more mainstream it's probably more viable than thought in the past, still I imagine system-driven games or complex real-world simulations, with lots of side effects, would lose more from FP than they'd gain.