Item loot fails because of bagging and the risk of ganking.
Gank squads will be at every druid ring and wiz spire.
Everyone will end up playing casters, who can kill naked. Why risk pvp when it's more of a risk for your class?(melee/hybrid)
Most fights are predetermined. The one who initiates the pvp wins prolly 75% of the time. If said initiater is better geared, higher level, or just the right class, it jumps to near 100%.
So why would that player who is being attacked not immediately run/gate and or start bagging their valuables?
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