How does place size affect performance?

I am making a place that is around 1000x1000 in the xz plane. The max height of my place needs to be as high as possible without sacrificing performance on the average PC or mobile device.

The server should be able put interactable models and humanoids throughout the height of the map. I don’t want players to lag because of things happening in this large range. What should I consider as I design my game to keep the game running well?

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Use Filtering Enabled to your advantage and do some cool stuff with Local Scripts. Delete objects when they are too far and let the server notify a player (via remote event) if there is an intractable object within the “render distance”.

How do you control what gets replicated to a client? Or do I have to make parts on local scripts? If I did that, if one player is fighting a boss really high up how do I make sure another player sees that once they come into range?

Another option would be StreamingEnabled. You’ll have to handle things with care in the client though.
Here’s a tutorial that might help you with a common problem with this feature:

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This feature makes a lot of sense… thanks for showing me it.

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