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In the book http://www.amazon.com/Multiplayer-Game-Programming-Architecting-Networked/dp/0134034309 , they describe a thing which is essentially a frustum-based interest management. They do acknowledge obvious problems with sharp turns, and suggest two-layer system: (a) for short distances - distance-based, and (b) for longer distances - frustum-based.
I'm wondering - are there any serious games out there doing this kind of stuff?
I did frustum-based for There.com, but we could never get it to work fast enough when doing sharp turns. (Mind you, our min spec was a 56k modem ...)
I would recommend against it. I'd almost always recommend scaling down update rate when things get dense, and guarantee a particular radius be visible. You also want to prioritize certain entities. Mainly, if you're in a group, prioritize group members; if you have targets, prioritize those of the player and her group members.
