diff --git a/client/garageserver.io.js b/client/garageserver.io.js
index 3bf903b..3007867 100644
--- a/client/garageserver.io.js
+++ b/client/garageserver.io.js
@@ -1,6 +1,5 @@
 /*
 options = {
-    onUpdatePlayerPhysics: function (state),
     onConnect: function()
     onPlayerUpdate: function (data),
     onPlayerDisconnect: function (id),
@@ -16,6 +15,7 @@ window.GarageServerIO = (function (window, socketio) {
     var io = socketio,
         socket = null,
         sequenceNumber = 0,
+        processedSequenceNumber = 0,
         players = [],
         inputs = [],
         updates = [],
@@ -65,6 +65,21 @@ window.GarageServerIO = (function (window, socketio) {
                 if (!updateFound) {
                     updates.push(data);
                 }
+                if (options.clientSidePrediction) {
+                    for (updateIdx = 0; updateIdx < updates.length; updateIdx ++) {
+                        if (updates[updateIdx].seq == processedSequenceNumber) {
+                            updates.splice(0, updateIdx);
+                        }
+                    }
+                    for (updateIdx = 0; updateIdx < inputs.length; updateIdx ++) {
+                        if (inputs[updateIdx].seq == processedSequenceNumber) {
+                            inputs.splice(0, updateIdx + 1);
+                        }
+                    }
+                    if (updates.length > 0 && inputs.length > 0) {
+                        options.onUpdatePhysics(updates[0].state, inputs);
+                    }
+                }
             } else {
                 for (playerIdx = 0; playerIdx < players.length; playerIdx ++) {
                     if (players[playerIdx].id === data.id) {
@@ -77,7 +92,7 @@ window.GarageServerIO = (function (window, socketio) {
                             }
                         }
                         if (!updateFound) {
-                            players[playerIdx].updates.push( { state: data.state, seq: data.seq } );
+                            players[playerIdx].updates.push({ state: data.state, seq: data.seq });
                         }
                         break;
                     }
@@ -88,7 +103,7 @@ window.GarageServerIO = (function (window, socketio) {
                         id: data.id,
                         updates: []
                     };
-                    player.updates.push( { state: data.state, seq: data.seq } );
+                    player.updates.push({ state: data.state, seq: data.seq });
                     players.push(player);
                 }
             }
@@ -111,18 +126,34 @@ window.GarageServerIO = (function (window, socketio) {
             }
         },
 
-        addPlayerInput = function (input) {
-            sequenceNumber += 1;
-            inputs.push(input);
-            if (options.clientSidePrediction && options.onUpdatePhysics) {
+        addPlayerInput = function (clientInput) {
+            var currentState = {},
+                newState = {},
+                inputsToProcess = [];
 
+            if (options.clientSidePrediction) {
+                for (var i = 0; i < updates.length; i ++) {
+                    if (updates[i].seq == processedSequenceNumber) {
+                        currentState = updates[i].state;
+                    }
+                }
             }
-            sendPlayerInput(input);
+
+            sequenceNumber += 1;
+            inputs.push({ input: clientInput, seq: sequenceNumber });
+
+            if (options.clientSidePrediction && options.onUpdatePhysics) {
+                inputsToProcess.push({ input: clientInput });
+                newState = options.onUpdatePhysics(currentState, inputsToProcess);
+                processedSequenceNumber += 1;
+                updates.push({ state: newState, seq: processedSequenceNumber });
+            }
+            sendPlayerInput(clientInput);
         },
 
-        sendPlayerInput = function (input) {
+        sendPlayerInput = function (clientInput) {
             var currentTime = new Date().getTime();
-            socket.emit('input', { input: input, seq: sequenceNumber, timestamp: currentTime });
+            socket.emit('input', { input: clientInput, seq: sequenceNumber, timestamp: currentTime });
         },
 
         getPlayerStates = function (stateCallback) {
diff --git a/example/public/javascripts/game.js b/example/public/javascripts/game.js
index c5fedcb..2ef3c2b 100644
--- a/example/public/javascripts/game.js
+++ b/example/public/javascripts/game.js
@@ -1,5 +1,27 @@
 $(function () {
-    GarageServerIO.connectToGarageServer('http://garageserver_io.jbillmann.c9.io', { logging: true });
+    GarageServerIO.connectToGarageServer('http://garageserver_io.jbillmann.c9.io', { 
+        logging: true,
+        clientSidePrediction: true,
+        onUpdatePhysics: function (state, inputs) {
+            var i = 0;
+            if (!state.x && !state.y) {
+                state.x = 0;
+                state.y = 0;
+            }
+            for (i = 0; i < inputs.length; i ++) {
+                if (inputs[i].input === 'left') {
+                    state.x -= 1;
+                } else if (inputs[i].input === 'right') {
+                    state.x += 1;
+                } else if (inputs[i].input === 'down') {
+                    state.y += 1;
+                } else if (inputs[i].input === 'up') {
+                    state.y -= 1;
+                }
+            }
+            return state;
+        }
+    });
 
     var gameCanvas = document.getElementById('gameCanvas'),
 
diff --git a/lib/server/garageservergame.js b/lib/server/garageservergame.js
index 564f05a..245053b 100644
--- a/lib/server/garageservergame.js
+++ b/lib/server/garageservergame.js
@@ -24,8 +24,8 @@ GarageServerGame.prototype.updatePhysics = function (options) {
             if (this.options.onUpdatePhysics) {
                 this.players[i].state = this.options.onUpdatePhysics(this.players[i].state, this.players[i].inputs);
             }
-            this.players[i].inputs = [];
             this.players[i].sequence += this.players[i].inputs.length;
+            this.players[i].inputs = [];
         }
     }
 };