The games are run on servers, which keep track of every player’s position, health, rotation, etc. and relay the relevant information to the players.
This means that, as a player, your system only needs to know your position, health, rotation, etc. and only has to handle the information for other players if they’re within a certain distance from you. Basically, on your system, only things within a 50 m radius of your position need to be handled and everything else is handled by the server.
Most of them run on dedicated servers so the entire game isn’t dependent on a single “host” connection. Each player connecting to the server represents a separate connection. So if one is bad it only affects that person and the rest are fine. Servers are also typically regional so it reduces lag by proximity.
The majority of information that is being sent and received over the internet is info about the position of the players, which is not very much information relatively speaking. All the other stuff in the game that you see is created using the assets that are stored in your computer locally (either the game disc, cartridge, or hard drive). Also, sometimes the game is optimized to run well online and may, at times, sacrifice accuracy for the sake of running smoothly. So it’s not lagging but the game outcome isn’t as accurate as it would have been if you were doing couch multi player.
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