^^^ Yup. LOD stands for Level of Detail and as the person above me noted it is a trick of the engine that tells the (in this case shaders that you will never have to care about) that if something is close to the player it should be beautiful and higher poly, but if it’s far away there is no need to render such a high poly mesh so you should save that budget and spend it on framerate. In the span of something like you mentioned, SimCity, the savings is huge. If there are 200 (at let’s say 1000 polys per) buildings on the screen but 120 are in “the distance” and LOD’d to 20% some basic math says there are 80 buildings on my screen at 1000 which is 80,000, and 120 at 200 which is 24,000 = 104,000.
Without using LODs it would be 200,000 polys on screen. Pretty huge difference. Most people use a more sophisticated “cascading” chain of effect on their LODs where they render at a mile distance so I’ll say anything within 2 miles of the player is 100%, at 5 miles drop it to 50%, at 10 drop it to 25% and render anything beyond that at only 5%. It’s calmer on the users’ eyes and saves EVEN MORE of that precious precious budget I talked about above. Most players’ eyes are drawn to the models with the most detail, so doing this isn’t detrimental to play either. Plus it causes the cause and effect where you want to see better so you zoom in, it renders a higher LOD and the process continues.
Here, this is the doc on simple static mesh LOD’s if you want to play around with them on that mesh you’ve got going on there. It’s pretty cool and really handy to use. I imagine you’ll see some performance optimization. Good luck!