Can Atmel Studio 6 Simulator simulate SPI?
No Atmel Studio cannot simulate SPI.

The fact that you are using SPI makes me think that you are using the MAX7456 IC or even the SparkFun On Screen Display Breakout which uses this same IC.

You can generate composite video just by using a few resistors and an Arduino.  

I have found a number of sites on Google who have used the Arduino to output PAL composite video to display the Pong game on an old TV.


http://searle.hostei.com/grant/AVRPong/index.html
http://www.makeuseof.com/tag/how-to-recreate-the-classic-pong-game-using-arduino/
http://www.instructables.com/id/2-player-Pong-using-Arduino/
http://forum.arduino.cc/index.php?topic=8708.0
http://apcmag.com/arduino-project-7-build-a-retro-gamebox.htm/
http://electronics.divinechildhighschool.org/Home/electronics-spring-2012-1/arduino-pong