Magicka is rather unique in its handling of multiple players. Up to 4 players can either connect via a network, or directly on one machine using a USB Gamepad.
There are currently two multiplayer modes in Magicka: Adventure mode is available for players who wish to cooperatively run through Magicka's storyline, while Challenge mode is for survivalists who want to test their skills against a large horde of monsters.
To create a multiplayer game one player has to host it. Others can join either via the server browser, by typing in the IP Address directly or via Steam. Searching for a game via a host name is currently not supported.
The host can choose to make the server private by filling in a password.
Adventure
The adventure mode is identical to the singleplayer campaign and can be played by up to 4 players. With the revive Magicka dead wizards can be quickly revived, though with minimal health. If the entire party gets killed everybody revives at the last checkpoint.
The game host provides the savegame for everybody. All other members do not advance in their singleplayer campaigns but do get credit for any achievements that they unlock.
If one player picks up a spellbook, the contained Magick is instantly available to all other players.
Challenge
In challenge mode the players try to survive as long as possible against multiple waves of monsters. Each wave is more difficult to beat than the last. There are 20 maximum waves to this mode.
So far there are two maps: Hávindr Arena and The Glade. Both maps are circular and are impossible to exit.
PvP Battle
According to the official website there is also a PvP battle mode in which players can fight against each other[1]. However this is not yet implemented. (A Forum post claims that PvP mode will be unlocked after you beat the game but this has yet to be confirmed.)
Notes
1. ^ "Official Website - Game info" Retrieved 28 January 2011.