After some traveling around on the Internet for a while, I've come to one conclusion on Video Game Difficulties. Difficulty should determine enemy intelligence, not firepower or health (but a little stat increase, maybe 1.5x doesn't hurt either). But is there such a thing as too much enemy intelligence? How many settings should there be, what should they be called and what are some examples for those levels?
Indulge me, Forumites.
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There is such a thing as too much enemy intelligence. A computer that has perfect aim and perfect knowledge of the map and perfect communication with all the other computers could easily be overwhelming. Thankfully Perfect AI are extremely difficult to create, it's much easier to simplify the various problems they face to make it easier for them to handle things and it introduces a certain amount of "stupidity" that makes things more realistic. How many settings should there be? The more you study Game Design, the more you'll find that there isn't a right answer, it is by no means a perfect science at this point.