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There are some problems with the netcoding of this game and people have come up with various work arounds for the problems over the years. I'm afraid that there won't be any updates to the game to fix the issues however. Sorry :/

Here are some resources for problem solving:

http://steamcommunity.com/app/42910/discussions/0/864949719232276054/
http://forum.paradoxplaza.com/forum/showthread.php?700226-Compilation-of-useful-information
http://forum.paradoxplaza.com/forum...***READ-BEFORE-POSTING-(Link-to-solutions)***

I'm sorry I couldn't provide you with more specific solutions.
 
So you acknowledge that in a co-op focused game basic co-op doesn't really work, yet continued to create DLC and work on a sequel without ever fixing it?

Sorry if I come across annoyed, but me and 2 friends just bought this and despite being a relatively old game with many patches and DLCs released it basically doesn't work. Sometimes we can't leave a lobby, sometimes the menu is black, the UI is unintuitive and unresponsive. When we do get into a game there is severe FPS and network lag. It's completely unplayable.

EDIT: oh right, the forum is so incredibly dead that I managed to necro from the first page.

The netcode was not very good for Magicka, no. We did work on it a lot, but it was not easy to fix. We did learn much from it however. And we kept making DLC's as people kept asking for and buying them. It's as simple as that.

I think you might have better luck getting help with connection issues over at http://steamcommunity.com/app/42910/discussions/ Most Magicka talk takes place on the Steamhub these days, but thank you for coming to this back alley of the internet.
It's always nice with visits :)