Couldn't you have X players moving on a global grid? I have built systems with literally tens of millions of players (Erlang processes) moving on a grid (and doing way more, localized threat detection, decision making, moving away or towards, and coordination with other units in X range).
One complication is that my grid is for a procedurally generated world with 2^120 locations in it. This is why I generate subgrids. A degenerate case is one subgrid per user. However, these subgrids are organized in load-balanced groups, each of which has their own thread pool, caches, and locks.
Also, rollbacks are problematic, though the real problems are arguably corner cases.
Erlang might be a win because each garbage collector only has to deal with its own local memory.
EDIT: It turns out my algorithm is somewhat similar to Pikko:
http://www.erlang-factory.com/upload/presentations/297/Pikko...
One big difference, is that my algorithm doesn't move or reconfigure masts, instead it dynamically creates subgrids, which are then grouped into "workgroups" each of which is supposed to be processed by a different CPU socket. Instead of there being an API, it's more that the subgrids stop what they are doing and their information is briefly managed by the global grid code. (The procedurally generated map is rigged, so that there are many opportunities for crossing from one subgrid to another.)
Our units actually would report to intermediaries their maximum interaction boundries, which would then be passed to processes to create something somewhat like a mast, someone like a subgrid -- a dynamic interaction zone. All our units had hard constraints (max speed, etc) and worked in global ticks that represented real time. Then, we would talk to global to stretch all the interaction zones to fill empty space and report back boundaries. Then, our units would work in little worlds until they crossed a threshold, we caused a rezoning among them and their neighbors. So initially, the everything would have to be parsed out into interaction zones, but then they could ignore each other for periods of times until a unit strayed across an edge, and then rezoning took place.
Not sure how well it would work with amped up movement (making it have to go all the way up to global more) and not certain how it would work at the scale of 1 undecillion 329 decillion 227 nonillion 995 octillion 784 septillion 915 sextillion 872 quintillion 903 quadrillion 807 trillion 60 billion 280 million 344 thousand 576 points!
I think I can make my subgrids algorithm work, but it will have to be using mutable data structures.