The current difficulty settings can be found
here.
These are not well-balanced. At all. The difficulty in terms of keeping enemies under CC lock? Does not change at all. The difficulty of using Charisma does not change at all. For the most part, the difficulty settings hurt attack-based characters, while also having a huge and somewhat counterintuitive impact on certain talents (Glass Cannon becomes worse, Picture of Health becomes better).
Having more impact on these specific character types and talents is something I call
specificity bias, which means: certain playstyles are significantly more impacted by difficulty setting than others. Removing specificity bias completely is impossible; there are always going to be some playstyles which can get you through Normal but do not make the cut in Hard, because if there weren't, Hard wouldn't actually be hard, as you could do whatever you want and still make it through. However, it is possible to apply difficulty changes in such a way as to have less specificity bias than we have currently.
One of the main causes of specificity bias in a game such as this is that it has a lot of depth, yet having a complex list of changes is not
elegant. Elegance, in game design, means achieving the maximum depth with the minimum complexity. Right now, difficulty changes are a list of four different things; if you were to manually list all of the ways to make the game more challenging for a wide variety of playstyles, your list would grow to several if not dozens of items, which is hugely complex and strains the player's ability to keep all the changes in their head for theorycrafting, etc.
However, games like this already use simplification systems in order to make a simple task out of harnessing a lot of mechanical depth. In this game, two key systems used are Attributes and Abilities. Increasing your Perception by a couple points has no less than five different impacts on your character, yet listing "+2 Perception" is simple and elegant. When taken overall, the Attribute (ex: Str, Con) and Ability (ex: Charisma, Bodybuilding) systems have impacts on virtually every facet of play.
In order to have an elegant system which has the minimum amount of specificity bias, it is vital that these simplification systems be harnessed.Thus here is my suggestion for new difficulty settings, to
replace the old ones...
Easy (base): Player Attributes start at 6 (instead of 5). NPC Charisma defaults to -1, which means 2 points per win.
Normal: -1 to player Attributes (start at 5); +1 to all enemy and NPC Attributes and Abilities; +5% to all enemy and NPC resistances
Hard: -2 to player Attributes (start at 4); +2 to all enemy and NPC Attributes and Abilities; +10% to all enemy and NPC resistances
This proposal utilizes the existing systems for simplifying complexity, in order to make an entire multitude of changes to gameplay while remaining elegant (actually only three list items instead of the current four). Shifting between difficulties on the fly would still be possible; you would simply take a penalty/bonus to your Attributes.