There are three modes in Torchlight II: offline single player, local area network (LAN), and internet multiplayer.
How multiplayer worksEdit
Multiplayer is peer-to-peer. That means the game is hosted on one (or more) of the players' computers. Runic Games does not run game servers, except for a lobby server that lists online players and current games.
If players in the same game are in different parts of the game world (or if a player loses internet connection during a multiplayer game), the game will attempt to seamlessly switch hosts. For example, if a player gets disconnected from the host, their own computer will take over running their game session.
Difficulty setting (easy, normal, etc.) is selected when a player creates a new multiplayer game. It does not have to match the difficulty the character was created with.
Players need to be in close proximity to affect each other's gameplay. In multiplayer, experience is shared, but difficulty ramps up (players do less damage to monsters) when many players are near each other.
A player can teleport to any other player from any waypoint.
Loot is instanced. Each player sees only their own loot.
To trade or give items to others, you must open the trade interface by clicking on the player's portrait.
- Loot can be stored in the Shared Stash, to share it with other Characters. Experience is also carried with the Character.
A Runic Games account (http://secure.runicgames.com) is required to play in internet multiplayer games. It is not needed to play over LAN or single player.
The Runic account is used for the internet lobby system, friends lists, and ignore lists. It does not store character data or saved games; these are stored locally on your computer (unless you use the Steam version and save through the Steam Cloud).