Artificial difficulty is a method of increasing the challenge within a game by simply buffing the enemy's health and/or damage, while other aspects remain the same. An example of this would be the AI within most RPG and/or MMO games.
The opposite of this, which I will call genuine difficulty, is where enemies will begin to behave in different ways and employ different tactics and smarter play as a method of increasing difficulty. An example of this would be the AI within most RTS and Fighting games.
What's your opinion on artificial difficulty?
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I prefer when they work in tandem.