In this paper, we present a new multibody physics simulation framework that utilizes the subsystem-based structure and the Alternating Direction Method of Multiplier (ADMM). The major challenge in simulating complex high degree of freedom systems is a large number of coupled constraints and large-sized matrices. To address this challenge, we first split the multibody into several subsystems and reformulate the dynamics equation into a subsystem perspective based on the structure of their interconnection. Then we utilize ADMM with our novel subsystem-based variable splitting scheme to solve the equation, which allows parallelizable and modular architecture. The resulting algorithm is fast, scalable, versatile, and converges well while maintaining solution consistency. Several illustrative examples are implemented with performance evaluation results showing advantages over other state-of-the-art algorithms.