Item Upgrade

Intro

There are four ways armor and weapons can be upgraded at a Steam Forge.

Armor can have it's Defense increased by upgrading with a Gower Stone.
Weapons can have an Attack increase by using a Seril Stone.

A weapon can have an [S] upgrade using a Craftman's Hammer for a bonus to skills .

Armor and weapons with a socket can be combined with a Core Machine to make a Steam Machine.

A piece of upper, lower armor, or robe can be combined with a Cash Shop Costume Scroll to turn the armor into a costume.

Seril Stones, Gower Stones, and Craftman's Hammers

Bronze Seril Stones and Bronze Gower Stones drop off mobs under level 15.

You can refine 15 Bronze Seril Stones into one Silver Seril Stone.
You can refine 15 Bronze Gower Stones into one Silver Gower Stone.

The best drop rate for Silver Seril Stones and Silver Gower Stones is in Riall.

Silver Seril Stones drop off L20/L25 mobs in the Garden, the L40 mobs in the Ancient Factory, and the L50 mobs in Dimension Rift.
Silver Gower Stones drop off the L15 mobs in the Garden, L35 mobs in the Ancient Factory, and the L55 ranged mobs in Dimension Rift.
Silver Seril Stones and Silver Gower Stones also drop off Lookout/Outpost NPC leaders.

Gold Seril Stones and Gold Gower Stones drop off the Maestros/High Priests at the entrance of each town and castle.
You'll have to invade the opposing nation to assassinate the Maestros/High Priests.

Craftman's Hammer Lv. 1 is lucky loot that can drop off any mob.
Craftman's Hammer Lv. 2 usually drops off Bosses in Elerd or Rogwel.
CRaftman's Hammer Lv. 3 usually drops from Bosses in Rope Isle.

Thanks to Miin for posting this information on the Riall drops

Instructions

1) Tak to the Master Craftsman or click on the Steam Forge.
2) Select the Enhancement option
3) Put the armor or weapon in Item slot
4) Put the Seril Stone, Gower Stone, Craftman's Hammer, Core Machine or Costume Scroll in the Enhancer slot.
5) Click on Okay to attempt to combine the Item with the Enhancer.

Core Machines and Costume Scrolls

Weapon Core Head Core Upper Armor Core Glove Core Lower Armor Core Shoe Core Costume Scroll

These have a 100% success rate.

A Costume Scroll can be used on Upper Armor or Lower Armor, and Robes.
A Costume has the same level requirement as the original armor, but has no stats.
The Costume can be worn in a costume slot and will appear instead of the armor worn in the armor slots.

Armor Upgrade

You can upgrade any piece of armor or a shield. You can't upgrade a cape.
The armor can be common, semi-rare or socketed. The shield can be common or semi-rare.
The maximum armor/shield upgrade is +10.

If you fail when upgrading using a Gold Gower Stone, the item will lose two upgrade levels.
If the item was +4 and you fail, the item is set to +2.
If the item is +2 or +1 and you fail, the item is set to the minimum of +1.

Enhancer Item Level Success Max Upgrade Failure Bronze Gower Stone (bgs) 1 to 16 adds +1 +4 Item reset to +1 Silver Gower Stone (sgs) any level adds +1 +10 Item reset to +1 Gold Gower Stone (ggs) any level adds +1 +10 item downgraded 2 levels Artisan's Touch (cash shop) any level adds +1 +10 no penalty Master's Touch (cash shop) any level adds +1 +7 100% success rate Sage's Touch (cash shop) any level adds +1 +10 100% success rate

Upgrade Defense Increase Total Defense Increase Success Rate +0 -> +1 +2 +2 100% +1 -> +2 +2 +4 100% +2 -> +3 +2 +6 100% +3 -> +4 +2 +8 80% +4 -> +5 +2 +10 60% +5 -> +6 +2 +12 30% +6 -> +7 +2 +14 25% +7 -> +8 +3 +17 25% +8 -> +9 +3 +20 12% +9 -> +10 +4 +24 2%

Weapon Upgrade

You can upgrade any kind of weapon.
The weapon can be common, semi-rare, rare or socketed.
The maximum weapon upgrade is +10.
Upgrading a weapon will make the weapon glow.

A +5[S5] weapon. Notice the blue glow

If you fail when upgrading using a Gold Seril Stone, the item will lose two upgrade levels.
If the item was +4 and you fail, the item is set to +2.
If the item is +2 or +1 and you fail, the item is set to the minimum of +1.

Enhancer Item Level Success Max Upgrade Failure Bronze Seril Stone (bss) 1 to 16 adds +1 +4 Item reset to +1 Silver Seril Stone (sss) any level adds +1 +10 Item reset to +1 Gold Seril Stone (gss) any level adds +1 +10 item downgraded 2 levels Artisan's Touch (cash shop) any level adds +1 +10 no penalty Master's Touch (cash shop) any level adds +1 +7 100% success rate Sage's Touch (cash shop) any level adds +1 +10 100% success rate

Upgrade Attack Increase Total Attack Increase Success Rate Weapon Glow +0 -> +1 +5% +5% 100% yellow glow +1 -> +2 +5% +10% 100% yellow glow +2 -> +3 +5% +15% 100% yellow glow +3 -> +4 +5% +20% 80% blue glow +4 -> +5 +5% +25% 60% blue glow +5 -> +6 +5% +30% 30% blue glow +6 -> +7 +5% +35% 25% purple glow +7 -> +8 +10% +45% 25% pink glow +8 -> +9 +10% +55% 12% red glow +9 -> +10 +15% +70% 2% white glow

Weapon [S] Upgrade

You can [S] upgrade any kind of weapon.
The weapon can be common, semi-rare or socketed.
The [S] upgrade provides a bonus to skills, usually skill damage.
The [S] upgrade cannot be higher than the attack upgrade of the weapon.
A +5 weapon can't have a [S] upgrade of more than 5.

The [S] upgrade causes the handle of the weapon to glow.
The higher the [S] upgrade, the brighter the handle glows.

A +5[S5] weapon. Notice the bright glow around the handle

The success rate on upgrading using a Craftman's Hammer is unknown, but is considered to be
much lower than a normal weapon upgrade.

Enhancer Item Level Success Max Upgrade Note Craftman's Hammer Lv. 1 any level adds +1 [S] +[S3] no gem, Lucky loot Craftman's Hammer Lv. 2 any level adds +1 [S] +[S6] blue gem, Elerd/Rogwel Boss loot Craftman's Hammer Lv. 3 any level adds +1 [S] +[S9] green gem, Robe Isle Boss Loot Master's Hammer Level 2 any level adds +1 [S] +[S6] Craft NPC Master's Hammer Level 3 any level adds +1 [S] +[S9] Craft NPC Master's Hammer Level 4 any level adds +1 [S] +[S10] Premium Item

Item [S] Level Failure Craftman's Hammer Lv. 1 [S1] to [S3] weapon reset to [S0] Craftman's Hammer Lv. 2/3 [S4] to [S9] weapon destroyed Master's Hammer Lv. 2 [S4] to [S6] weapon reset to [S0] Master's Hammer Lv. 3 [S4] to [S9] weapon reset to [S0] Master's Hammer Lv. 4 [S4] to [S10] weapon reset to [S0]

Dropped items can have up a [S5] upgrade.
Items can safely be upgraded to [S3] with a Craftman's Hammer.
A weapon will be destroyed on an unsuccessful upgrade past [S3] with a Craftman's Hammer.
A weapon will be reset to [S0] on an unsuccessful upgrade using a Master's Hammer.

Always use Craftman's Hammers to upgrade a weapon to [S3].
Use Master's Hammers to upgrade a weapon past [S3].

Upgrade Skill Bonus Total Skill Bonus Success Rate +[S0] -> +[S1] +2% +2% +[S1] -> +[S2] +2% +4% +[S2] -> +[S3] +2% +6% +[S3] -> +[S4] +3% +9% +[S4] -> +[S5] +3% +12% +[S5] -> +[S6] +3% +15% +[S6] -> +[S7] +4% +19% +[S7] -> +[S8] +4% +23% +[S8] -> +[S9] +4% +27% +[S9] -> +[S10] +5% +32%

S4 glow	S5 glow	S6 glow	S7 glow
S8 glow	S9 glow	S10 glow

Master's Hammers

A Master's Hammer is a premium item.

A Master's Hammer can also be crafted by a Craft NPC.
You need a Lv. 2 or Lv. 3 Craftman's Hammer and a Master's Gem.
Speculation: I believe that Master's Gems drop from bosses in the Abyssal Factory/Abyssal Temple
The crafted Master's Hammer will not break a weapon if the [S] upgrade fails.

Credits

Nico's Item Upgrading guide from global
Sade's Update to Nico's Guide