Prior to A17, in previous game versions, item quality also had an effect on the damage and block damage done by weapons or tools. This is no longer the case. However, since adding mods to an item generally increases its damage and block damage, quality indirectly results in greater effectiveness since more mods can be added onto the item.
Item quality is indicated by both a color-code for quick reference and a numerical value as a precise measure of quality, displayed beneath the item's icon in the Inventory. The measure for quality ranges from 1 - 6:
|Color||Quality||Item Level||Number of Mods Allowed|
Madmole has suggested that Alpha 17 will feature legendary quality weapons that can only attained as rare loot with unique stats and buffs.