There's a fair bit of confusion around how item level of end-game rewards works in Legion - understandable, since we haven't really gone into detail about how the system works, instead focusing on high-level goals and philosophies. Let me take a crack at changing that.
Scaling vs. Static Item Level - "Anything Can Happen"
This came up in the first Legion Q&A a couple of weeks ago, but in past expansions, the endgame item structure has always been defined by a rigid series of flat plateaus. In Warlords, Normal dungeon loot was Item Level 615. Heroic dungeon loot was 630. Normal Highmaul was 655. And so forth. Once you had Raid Finder gear or better, there was zero value to items from dungeons. In patch 6.2, Tanaan Jungle only offered Baleful items that could be empowered up to item level 695. If you were a Hellfire Citadel raider, setting out to do Tanaan dailies (to unlock flying, let's say), there was zero chance that anything could happen during that play session that might make your character stronger. And in a game underscored by progression, that's a shame.
In essence, Legion changes those flat item-level plateaus into peaks that taper up to a global max potential item level.
When you earn an item from nearly any endgame source (dungeon, raid, world quest, PvP strongbox, mission, etc.), it has a chance of upgrading its quality. When looking at information on your rewards in sources like the Dungeon Journal or World Quest display, you'll see these items with a "+" next to their item level, indicating this chance to upgrade (e.g. the Dungeon Journal for Heroic Legion dungeons showing "Item Level 825+").
While there's a bunch of math behind it all, this may be a useful way of thinking about it: When generated, these items have a chance to roll a +5 item level bonus. If that roll succeeds, the system rolls again for another +5 bonus. If that succeeds, it rolls again. This process continues until an upgrade roll fails or the global item-level ceiling is reached. That's it.
And so, in Legion, even if you're a raider, if your friend is looking for someone to queue Heroic dungeons, you have an extra motivation to volunteer aside from pure altruism. You probably won't get an upgrade. But you might. Anything could happen.
"Titanforged" - What's the Deal?
Titanforged is just a label that applies when an item successfully upgrades by +15 or more item levels. It isn't really an inherent part of the system itself, but rather something we added midway through development to make it clear when you just got exceptionally lucky.
RNG, Progression, and Prestige
A frequent concern with the Legion item system is that the very possibility of a Mythic-raid-quality item coming from a quest or dungeon boss cheapens those rewards. But there's a huge difference between a single Mythic-quality item and a full set of gear of that quality. A player who mainly queues for Dungeon Finder and Raid Finder may end up with a couple of great raid-quality pieces, but that's a far cry from what someone who actually does high-end raiding will look like. Ditto for someone who casually queues for BGs compared to a top-rated arena player. After all, it requires far fewer lucky breaks for a Mythic Nightmare raid drop to make it to Item Level 895 than it would for a Heroic dungeon blue, by a huge margin. Your overall gear will still reflect the type and difficulty of content that you do, but a broader range of activities can be rewarding, and a broader range of players can have moments of surprise and excitement along the way.
Another concern raised in this thread relates to the impact of randomness on competitive progression. First off, the explanation above references a "global item-level ceiling" - that's simply a cap on how far any item can upgrade, and it's a value that will be set in relation to the highest available base item levels from the most difficult available content. Once Mythic+ dungeons and the Nightmare Raid are accessible, that value will be 895 (and that's the value to which the cap is currently set in beta). But for the first couple of weeks after launch, we're planning on having a lower cap in the 850s, since there is nothing available above that base item level. In the future, as new content is introduced, the ceiling will rise accordingly. Even the very luckiest person in the world won't be walking into raids and outgearing them on day one.
Finally, we're dealing with upgrade chances on individual item slots out of 16, belonging to individual characters out of 10-30 in a raid group. A single item won't make or break your raid's success. The law of averages suggests that raid groups that complete roughly the same amount of content will end up with roughly the same item level. We feel that the system will be a significant improvement to the individual gearing experience without harming guild competition.
My main question was - will Heroic and Mythic raid gear be able to upgrade past Warforged?
Since "past Warforged" just means "by more than +10 item levels over base," the answer to that is "yes."
Let me use some entirely made-up numbers as an example:
Let's assume that the chance to upgrade is 50% per +5 step to simplify the math. Clearly that is NOT the actual chance, as anyone who's been playing at max level on Beta can attest. But let's pretend that whenever an item drops, we flip a coin and bump the item level by +5 every time it comes up Heads. And we continue until we either flip a Tails OR the item reaches Item Level 895.
Let's consider three Emerald Nightmare drops: one from Raid Finder (835+), one from Heroic (865+), and one from Mythic (880+).
The Mythic Nightmare raid drop is guaranteed to be at least 880. We flip our imaginary coin (again, these are NOT the actual odds...). 50% of the time it'll come up Heads (woo, 885!), so we flip again. Again, half of the time we get this far (25% chance total, now) it'll come up Heads again (890!). And so we flip yet again, and yet again half the time we make it this far, we'll get yet another Heads (12.5% total). That bumps the item to 895, which is the cap, so we stop flipping coins and the item ends up at +15 over the base 880, which makes it Titanforged.
Using these hypothetical, made-up numbers, if you looted the same item from a Mythic Nightmare boss 8 times, you'd expect on average to see four 880 versions, 2 885 versions, 1 890 version, and 1 895 version.
Now let's look at the Heroic base item. That starts at 865, so you'd need to upgrade it six times (i.e. flip six Heads in a row, using our analogy) for it end up at 895. I'm not going to step through the probability tree again, but the 1/8 chance above now becomes a 1/64 chance. You'd need to loot 64 Heroic Nightmare raid items on average to see a single 895. The Titanforged chance (again, not the actual odds!!) would still be 1 in 8 (12.5%), since that just means 3 successful consecutive coinflips, but that would only bring the item to 880. You need to get much luckier to get all the way to 895.
Finally, our Raid Finder item. With a base Item Level of 835, it needs to upgrade 12 times to make it all the way to 895. Long story short, that's a 1 in 4096 chance of being 895. Let's say you get 2-3 items a week from fully clearing Raid Finder. You'd need to run Raid Finder every week for over 21 years in order to have a >50% chance of seeing a 895 item out of Emerald Nightmare LFR. By that time, we'll all be in item level 4000 gear as we play the latest Corgis Unleashed expansion on our VR decks (unlike the rest of this post, this part is entirely factual). But hey, you'll probably have that 895 Raid Finder item. Or you still might not. Still feel mandatory?
As this example hopefully illustrates, you're best off spending your time on the most challenging/rewarding content that you can tackle. This isn't destroying the foundations of WoW itemization and replacing it with massive randomness - by and large, players will progress through content of increasing difficulty and/or organization requirement, earning more and more powerful items as they go.
I'm going to assume that items can also roll warforged, for a maximum of 901? That's totally cool by me, but confirmation would be neato. Haven't managed to find an example of a high-TF WF item on beta yet.
Nope. "Warforged" as you know it in Warlords is gone with Legion, and isn't a separate system stacked on top of this one.
A "Warforged" item is one that got moderately lucky rolls (+5 or +10 over base). "Titanforged" kicks in once you cross the +15 threshold.
895 is the highest item level you will see while Emerald Nightmare is the active raid zone.