Nah, at first I was thinking it a possibility they were indeed physically transported into the game world, or rather a world that was like the game world would be in concrete 3D. But after Ryll's post, I reckon it more likely only their minds were copied there. If indeed anything was copied/moved. It would be more plausible than SAO's setting, especially when this game has many times more players from all over the world. There's simply no way they could be kept alive as coma patient equivalents in such numbers.