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A players will die if their Life drops to zero.
In Diablo I, the player must reload the game to continue playing.
In Diablo II, when the player dies they leave behind a corpse which holds everything they had equiped, all gold in the player's inventory is lost, and some gold from the stash may be lost as well. All potions that were on the player's belt are transferred to their inventory, and their Hireling dies. In Nightmare and Hell they also suffer an experience loss. They are then respawned in town.
At this point the player can either choose to save and exit, which will mean the player's corpse is next to them when they coninue playing, or they can attempt to find and reclaim their corpse, which will give the player back their items. Only the player whose corpse it is may claim it. A player may have more than one corpse at a time, but only the first will continue to exist if the player exits.
In team PvP, when a player dies they must remain a ghost until the next round begins. As a ghost, the player can view and move around the area but may not interact with the players still alive.