Game system changes in Diablo III: Reaper of Souls such as loot 2.0 and the new Paragon system will be released as a free patch for the base game.
Diablo III's Josh Mosqueira, at a special GamesCom 2013 panel, explained exactly how "loot 2.0," one of the new features of the upcoming Diablo III expansion set: Reaper of Souls, will work. Better yet, a Blizzard blue poster confirmed that game system changes, such as loot 2.0 and the new, infinite, account-wide, Paragon levels system, will be released as a free patch for the base game sometime before the expansion's release.
"The basic philosophy [of loot 2.0] is we wanna make sure that playing the game is the most fun, the most rewarding way to get items."
Mosqueria explains that loot drops in loot 2.0 will be less frequent, but better items, and more epic overall. "We really wanna make sure we're not constantly filling up your bags with items you don't care about." He says that one of loot 2.0's tenants is to make legendary items "build changers," and the way they have accomplished that is with special, legendary only modifiers.
For example, a legendary wand: "Serpent's Sparker" has a chance to summon a Hydra at the enemy's location, as well as grant arcane power on critical hits (a stat that now appears to be exclusive to legendaries).
He also details something called "smart drops," in which every time an item drops, it can calculate its stats to be more suited for the class that it drops for. In short: you should no longer be getting all those Wizard hats with +strength.
Mosqueria uses a standard run through of Act III inferno on a Paragon level 40 character as a comparison between the current loot system, and loot 2.0. Whereas now you would get around 253 white items, 399 blues, 275 rares and only 1 legendary, in loot 2.0 you would find 75 whites, 266 blues, 83 rares and 6 legendaries.
Lastly, Mosqueria introduces Reaper of Souls's new artisan: the Mystic, who can "transmogrify" and enchant items. World of Warcraft fans should be familiar enough with transmogrification - it basically takes the "look" from one item and applies it to another, while enchanting allows you to reroll a single affix on a rare or legendary item.
"Loot runs," short 15-20 minute dungeons consisting of randomized areas, monsters, and bosses, and Paragon 2.0, which is now account wide, were a couple other things Mosqueria touched on in his presentation.
Loot 2.0 is probably one of the changes I'm most excited about for the expansion, as we all know, the epic loot is the main reason anyone plays this game anyway!
Update: Another blue poster has confirmed that pretty much everything except the Crusader, Act V, the Mystic, and leveling up to 70 will all be included in a free pre-expansion patch:
"We want to implement a lot of the new systems and features in a pre-expansion patch for free. That should include Paragon 2.0, Loot 2.0, Loot Runs, and Nephalem Trials. For now, you'll need to purchase the expansion to play as the Crusader, explore Act V, unlock the Mystic, and level up to 70. These details may change as development moves along, but we want some of the core gameplay improvements to be available for everyone."
Source: Battle.net Forums