Networked virtual environments (net-VEs) are the next wave of digital entertainment, with Massively Multiplayer Online Games (MMOs) a very popular instance. Current MMO architectures are server-centric in that all game logic is executed at the servers of the company hosting the game. This architecture has lead to severe scalability problems, in particular since MMOs require realistic graphics and game physics – computationally expensive tasks that are currently computed centrally. We propose a distributed action based protocol for net-VEs that pushes most computation to the computers of the players and thereby achieves massive scalability. The key feature of our proposal is a novel distributed consistency model that allows us to explore the tradeoff between scalability, computational complexity at the server, and consistency. We investigate our model both theoretically and through a comprehensive experimental evaluation.