Its not so much I want to see games become ridiculously hard, I just want a bit of a challenge. I just feel that many games nowadays lack the ability to give you a real sense of accomplishment like they did in the past. I remember even playing RPGs from the 16/32-bit era that made me feel good about myself cause I beat a difficult boss or solved a difficult puzzle. Sure it took a little effort but is utilizing effort so bad?

"Modern" society has become too fixed on instant gratification and the idea of putting effort into things is apparently too troublesome for today's people.

As for difficulty setting, I see a few problems with this:

1) Balance. What's the difference between Normal mode and Proud mode in Kingdom Hearts? Not much if you ask me. Slight statistical differences that do nothing more than prolong the inevitable. The enemies can take more abuse but they are still smurfing retarded. CC had a similar problem. Course there's the other side of this. DMC1's Normal mode is challenging but jumping up to Hard mode throws you into a world of massive frustration. Rhythm games like DDR and Guitar Hero suffer from similar problems with the jump in difficulty being so great that some people never move past the most simple and basic modes. Nowadays, Normal means Very Easy and Hard means Extreme Hardcore for some developers. Developers need to find a happy balance.

2) Defining Challenge. Going back to KH's difficulty modes, what went wrong? If the enemies have greater health and you take more damage from hits, should the game be fairly more difficult? In theory yes, in practice no. The problem is that if the AI is stupid, buffing stats doesn't alter difficulty you're just making battles more tedious. If you have an enemy that is designed to be killed in one hit and runs straight at you with decent speed, he's not too difficult, now in hard more it takes two hits to kill him instead but he still foolishly charges into your attacks. Is he harder? Not really. DMC3 is a game with a good example of difficulty settings, the AI actually gets smarter rather than relying on simple stat buffing.

3) Not All Genres are Created Equally. AI improvements can help an action game but what about RPGs and strategy games? Games that generally focus on thoughtful planning rather than quick wits and reflexes. Stat modding seems to be the easy way out but it falls into the problem I mentioned above. You're just making battles tedious, not challenging. Some genres are more difficult to design for in the challenging department.

Personally, I feel stat modding can work but instead of raising defense or HP, it should be weaknesses and strengths. In normal mode the dragon boss is weak to ice and resists fire; in Hard mode he should be weak to lightening and resist fire ice and physical. Perhaps he counters with a devastating attack if you don't hit him with the correct weakness. Basically, you need to switch up strategy and punish the player a little more for making mistakes but of course we need to keep point 1 in mind as well so the game stays fun...

I feel one of the real problems though, is that while I feel developers would want to implement these kind of settings, in a genre where everything is becoming more and more "shovel-ware" and the majority of buyers are extremely casual gamers. Its difficult to see a reason to support a group (normal gamers) who make up a small minority of the profit pie. My only real fear is that the gaming industry is getting closer to repeating the gaming industry crash from the early 80's. I sometimes wonder if this "extreme casual" crowd only see's gaming as a fad and will move on when its over? I only wonder, cause it just doesn't feel like the industry is doing its best to convert these former non-gamers into "gaming investors".

Just some food for thought...