In this paper, the real-time simulation model of the modular multilevel converter was split into several independent parts through the use of the virtual capacitor concept. As a result, the number of state-space matrices the real-time solver needs to take into account reduces, which leads to the simulation step size decrease. The proposed concept was verified on a large-scale hardware-in-the-loop system comprising seven RT Boxes, where the model of the physical system is deployed, and ABB PEC800 industrial controller, where control algorithms of the real power hardware are executed.