One of the basic requirements for a virtual machine is network connectivity across other virtual machines and/or physical machines residing in the internal/external network. A virtual machine connects to the network through its Virtual Network Interface Controller (VNIC). The VNIC is mapped to a port group, which is in turn associated with physical uplinks, that is, Network Interface Cards (NICs).
It's not mandatory to have a physical uplink, a port group can remain an internal only port group.