This is better. This way you aren't entirely basing your gameplay on whether or not you get loot. Every time you run a group, you're interested in more than just getting an upgrade, you're interested in accomplishing your mission, unlocking a new passive trait, etc.
Less loot whoring equates to a better team dynamic. Less loot scaling equates to a better PVP experience.
I would be pissed if they change this ever. I want the worst gun in the game to be at worst 50% as effective as the best of the same type (though perhaps that't not true in this case, the closer to that the better).


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