I'm personally for item loot. Me and 3 of my friends will be rolling new characters on the PvP server and this exact feature is what enticed a couple of them.
I think it adds a whole lot of risk to the PvP aspect and makes thinks more interesting.
We'll play either way, but I'd really like to see some form of item/coin loot implemented.
I can assure you that I won't be on here bitching when someone takes my gear. That's part of the game, don't like it? Don't play.
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