Although Multi-Avatar Distributed Virtual Environments (MAVEs) such as Real-Time Strategy (RTS) games entertain daily hundreds of millions of online players, their current designs do not scale. For example, even popular RTS games such as the StarCraft series support in a single game instance only up to 16 players and only a few hundreds of avatars loosely controlled by these players, which is a consequence of the Event-Based Lockstep Simulation (EBLS) scalability mechanism they employ. Through empirical analysis, we show that a single Area of Interest (AoI), which is a scalability mechanism that is sufficient for single-avatar virtual environments (such as Role-Playing Games), also cannot meet the scalability demands of MAVEs. To enable scalable MAVEs, in this work we propose Area of Simulation (AoS), a new scalability mechanism, which combines and extends the mechanisms of AoI and EBLS. Unlike traditional AoI approaches, which employ only update-based operational models, our AoS mechanism uses both event-based and update-based operational models to manage not single, but multiple areas of interest. Unlike EBLS, which is traditionally used to synchronize the entire virtual world, our AoS mechanism synchronizes only selected areas of the virtual world. We further design an AoS-based architecture, which is able to use both our AoS and traditional AoI mechanisms simultaneously, dynamically trading-off consistency guarantees for scalability. We implement and deploy this architecture and we demonstrate that it can operate with an order of magnitude more avatars and a larger virtual world without exceeding the resource capacity of players' computers.@en