Latency still relates to physical networks, not all global networks are equal and especially home users.The physical network itself is hardly relevant, the necessary bandwidth is comparatively tiny and the latency you have to deal with is no different for 10 players as a 1000. It's a database and physics problem, how to do physics updates for 1000s of entities and how to generate+compress thousands of worldviews in a single tick. Also the client needs to be able to do good culling and LOD management of course.
Then there is the behaviour of the content switching-load balancing/backbone setup/redundancy/etc.
But my point went well beyond that and physical network, and from experience in this subject involves those I mentioned; if looking to do an implementation and solution that is massive/global and critically efficient.
This game will still have time/session sensitivity that is seen in more general MMO arcade games, along with as you say database-server/client related application challenges.
Like I said this involves a lot of the OSI Layer to do well, which includes session/application.
I think we are mostly in agreement just approaching this at different ends of the OSI scale (engineering vs programmer perspective).
From my experience all of the layers matter, and had to help a few times in resolving time sensitive issues because they did not understand the protocol-session behaviour well enough with their solution and also implication of global networking - just a basic example.
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