With Diablo III, the developers looked into fixing this problem. There appeared to be one quick and easy decision on this since it was revealed at the same time as the game itself. In this new installment, each player will be getting their own loot drops that only they can see and pick up. This stops the hustle to click on items first and allow players to play the game without worrying about fighting for drops.
While the system sounds simple enough, there has been a lot of discussion and debate on the intricacies of the system. There have been debates on whether or not there was any advantage to playing multi-player or single-player to get the best gear quickest. With multi-player, each player gets their own drops but can share their loot by picking it up and dropping it back on the floor. This allows every other player to be able to see it and pick it up. With four players in one game, this essentially increases the drop rate by four. To compensate for this increase, some have mentioned the idea that single-player drops would have a better chance of dropping better gear. However, this doesn't seem to be the case. cherubdown asked Bashiok this question about the separation of gear from multi-player and single-player. At first, his response was that there was better drop rates in multi-player. However, he soon recanted this statement and corrected himself.
Official Blizzard Quote:
Diablo: @cherubdown Sorry that was an incorrect answer. Drops don't change while playing in a group vs. alone.
In addition to the fact that there is no separation between the different modes, Bashiok also added the fact that Magic Find and other attributes will effect only the person's drops who is wearing the gear with those attributes. This, again, makes it so playing in a group will not give anyone an advantage to someone not playing in a group with MF stacked between the group.
Official Blizzard Quote:
I've gotten this same question wrong in the past, I don't know why it continues to confuse me.
Drops are not different in co-op. The fact that you're killing faster (which you will) in a group means more items in less amount of time, means we don't need to provide other incentives.
Your own drop modifiers will affect your personal drops, such as magic and gold find. But that's the same while playing alone or in a group.
Special thanks to Doomscream for finding this additional news on MF.
As long as I get something from a group kill i'm happy because, there is nothing I can do about the % of rarity I get from loot and since I know that i'll gladly move on.
It's only an advantage in multiplayer assuming everyone wants to share their gear with you exactly as you want it NEVER GOING TO HAPPEN unless they're specifically trying to help you farm a drop for yourself. And in that case, playing with friends makes farming easier? Yes please!
Official Blizzard Quote:
The fact that you're killing faster (which you will) in a group means more items in less amount of time, means we don't need to provide other incentives.
Also, I'm curious, when other players kill monsters, does our Magic Find apply to those monsters or does it get to zero for those?
Edit: rephrase
Well I normally let the big brains take that job because, I enjoy the playing the game not calculating it but we all enjoy things differently.
How is that not quite? That's exactly what it's saying. ONE MORE TIME GUYS:
The drop rate per character is IDENTICAL in single and multi-player.
Those words need to be printed in very large letters on the front page of this website.
There are other advantages to multiplayer because of item trading and rate of monster killing, but that's NOT changing the drop rate PER CHARACTER.
I think that they stated at some point that since all the items that were dropping only for you, that when an item dropped, it was always calculated with your magic find and such.
Your MF will be applied to your drops. If a monster drops for you, regardless of whether or not you killed it, it drop rate is dependent on your gear and attributes.
And Doomscream, I noticed you answered that magic find question, but it's still not clear to me... Assuming I have increased MF% (regardless of how), do I have to deliver the killing blow for it to apply? I seem to remember reading something somewhere that said this wasn't the case...
OK cool says I
We are taking away things that make you want to solo to do this says Blizzard
Well.. OK I'll trust you on that still sounds good says I
OH! and we are taking away the increased drops from being in co-op says Blizzard
WTF Blizzard says I
No, you do not even have to damage the monster.
AUGH!
The drop rate is the same, but because your teammates don't necessarily need the same items as you, and you kill stuff FASTER, you still have an advantage!
You WILL be at a slight advantage because you will be killing more monsters.