Long-Horizon Textual World Modeling through Structured Reasoning

World models are expected to support imagination over extended temporal horizons, yet most are still trained through local few-step prediction objectives and deployed by recursively rolling out their own predictions. This creates a fundamental mismatch: few-step losses optimize local transition fidelity, while long-horizon prediction depends on how errors and gradients propagate through the entire trajectory. As a result, transitions with different downstream influence on the endpoint are treated uniformly during training, and small local errors are amplified through recursive inference. We argue that long-horizon accuracy is better achieved by optimizing directly, through an end-to-end endpoint prediction objective. To instantiate this paradigm, we introduce the Direct Prediction World Model (DPWM), a non-recursive architecture that compresses an action sequence of arbitrary length into a single embedding and predicts the endpoint observation in a single forward pass. This design avoids recurrent rollout in both prediction and gradient propagation, making long-horizon end-to-end training practical at horizons where unrolled autoregressive training becomes unstable. Empirically, DPWM substantially improves long-horizon endpoint prediction over recursive world-model baselines on continuous-control and pixel-based benchmarks, with larger gains as the prediction horizon increases. We further show that recurrent baselines benefit similarly when retrained with the same long-horizon endpoint objective, supporting our central claim that the training objective, rather than the particular backbone choice, is the main driver of long-horizon prediction accuracy. Our results suggest that world models can benefit from being trained and evaluated at the temporal scales where they are ultimately used, shifting the focus from local transition modeling toward long-horizon predictive accuracy.

Large language models achieve strong performance in language generation and knowledge-intensive tasks, yet remain limited in settings requiring causal reasoning, persistent state tracking, and long-horizon planning. We argue that these limitations may arise from an objective-level mismatch between sequence prediction and reasoning over latent environment dynamics. To formalize this distinction, we introduce Latent Dynamics Inference (LDI), a conceptual perspective that interprets language and multimodal observations as partial evidence of underlying transition dynamics. To empirically investigate this perspective, we introduce Flux, a sequential reasoning environment specified entirely through natural-language rules. As a proof-of-concept case study, the rules are first compiled into an explicit state-transition simulator, illustrating that structured latent transition dynamics can, in some cases, be operationally extracted from textual rule descriptions. This enables a controlled comparison between the LLMs operating purely over textual observations and reinforcement-learning agents trained directly within the extracted latent state space. Within this case study, agents operating with explicit access to the latent state space exhibit substantially more stable behavior in long-horizon gameplay, achieving an aggregate win rate of approximately 79% versus 11% for LLMs. Qualitative analysis further reveals failure modes consistent with unstable persistent state tracking, including invalid actions, state-tracking errors, and short-horizon reasoning failures. The complete implementation of the Flux environment available at https://github.com/FeisalAlaswad/FLUX-RL-Agent Within the evaluated setting, these results suggest that strong sequence prediction alone may struggle to support robust long-horizon dynamic reasoning without mechanisms for persistent state tracking and transition modeling

Recently, world models have emerged as a promising paradigm for building intelligent agents by learning predictive models that estimate future environment states conditioned on observations and actions. In particular, JEPA-style latent world models provide an efficient alternative to pixel space prediction by learning action-conditioned dynamics in compact representation spaces. However, existing latent world models typically rely on one-step prediction and must be recursively rolled out for long-horizon planning, which leads to compounding errors and a mismatch between training objectives and downstream planning tasks. To address this limitation, we propose Variable-length Latent World Models (VLWMs), a framework that learns to predict future latent states conditioned on action sequences of variable lengths. Instead of training only on one-step transitions, VLWMs directly model temporally extended dynamics, allowing the same predictor to evaluate action plans over different horizons. We further introduce a curriculum training strategy that progressively expands the action horizon, stabilizing optimization from short-range dynamics to long-range prediction. At test time, we design planning methods tailored to VLWMs to better exploit their variable-length predictive capabilities. Experiments on long-horizon control tasks show that VLWMs significantly improve latent space world models, achieving 13% average improvement over the state-of-the-art LeWM across different datasets, with especially large gains on tasks requiring extended planning. These results suggest that VLWM provides a simple yet effective paradigm for improving long-horizon prediction and planning in latent world models.