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GD has received updates, free and paid, near continuously since it first arrived on Steam Early Access in late 2013 - it still receives balance updates to this day. TL2's only saving grace in comparison is that it is moddable, but then again so is GD.
Do with that info what you will.
Grim Dawn: Somewhat better story, a little better scaling of gameplay and a little more challenging, more to do endgame that you'd want to do IF grinding for equipment for potential other characters or just seeing how far you get in an endless-ish mode if thats what you want.
I legit can't remember if there was anything else to do in TL2 other than the story.. because i completed it once on hard and was just baffled by never dying and left with an extreme "that was it? this is what all the hype was about?" and just never really went back. I'll give it props for giving me a battle ferret though. Thats all I remember i really liked about it, lol. TL2 is okay, but GD is just a better experience overall for an arpg.
Oh, to answer your question, Grim Dawn by a landslide. It does basically everything 10x better than TL2. I'd only recommend TL2 if you're only interested in a casual ARPG experience, since it's the best game in the shallow end of the pool.
They're both good games, TL2 is more complex than TL1 of course.
There is an endless dungeon at the end of the story for both TL1 and TL2.
But also be aware, Runic Games was shuttered by it's corporate Parent (Perfect World) following the production of their last game (Hob). One of the three leads went on to form Echtra games, and produced Torchlight 3 ... but there were some serious issues with that, and Perfect World ended up shutting THAT down too.
Currently ... the TL IP is either owned by, or in the process of being acquired by THQ Nordic/Embracer Group (AFAIK).
Grim Dawn is a more complex game with more content overall. You're also asking the question on the Grim Dawn forums, so of course the answer you're going to get here is going to be "Grim Dawn".
Personally, I'd say play all three, all of them are fun.
(Conversely, I probably wouldn't recommend TL3, it's not unplayable, but it is a disappointment after TL2).
Most of the mods were really cool, like death knight from WoW as a character class and synergies overhaul series, but many like those are not well polished enough, leading to problems from my experience.
Back in the day multiplayer was cool with friends, but also troublesome with disconnects caused by the poor engine. I am not sure if it is even possible now to play online anymore.
It's part of "Synergies" iirc.
Especially when you already have Grim Dawn, which is a better game than even PoE in many ways.
TL2 is still fun to play occasionally heavily modded (Synergies pack and some other stuff like custom classes, new pets etc), and it has its charming "cartoonish" look when you've had enough of the gritty D2/GD world.
In conclusion it's too bad they messed up the third game... It could have been an awesome thing to play once you got burned out on GD.
Yeah, TL3 was deeply flawed, but I'm going to lay the blame at Perfect World's feet, they were the corporate parent, they were the ones who cut off the funding, ending development.
Not that Max Schaefer made the best plan forward though, he tried to build an MMORPG, and fans of the franchise wanted more of TL2, and then he tried to change the game during late development. (And without Eric and Travis Baldree, Max's odds of pulling off TL3 successfully were a lot lower to begin with).
The Torchlight IP is currently owned by THQ Nordic/Embracer Group.
So ... maybe they'll end up doing something with it. Dunno though, it would probably take someone who cared about the IP and had a viable business plan for it to get them to make an investment.
Grim Dawn is the total opposite with good graphics and fancy combat effects like the lush green clouds of acid spraying around, and thankfully no #@*$% fishing. I like the graphics in Victor Vran too but I couldn't get it to work well.
Hmm. Personally, I always like cartoony graphics, I think they generally age better than more "realistic" looks.