I would consider myself a competent gamer. I've been playing games for over a decade now and whilst there are many reasons why various people game I, like many others, sometimes enjoy the challenge a game can present. Therefore, I usually take advantage of the hardest difficulty a game has available to experience the ultimate level of challenge. Where I must utilise every gaming skill I've trained over that decade and become a master of the mechanics of the game at hand.
However, playing a game on the hardest difficulty is rarely a completely satisfying experience and often incredibly painful to finish. This is because, for the most part, developers are terribly lazy when it comes to creating additional challenge for the player. Generally, enemies will receive increased health and increased damage; the player receives reduced health, reduced damage dealt, less ammunition and increased damage taken. Layering the player with penalties is an incredibly fabricated method of making a game harder. These number tweaks simply result in a great deal of frustration and many, many cheap deaths.
For example, Call of Duty: Modern Warfare's Veteran difficulty follows this pattern of penalties which culminates in irksome gameplay of popping out of cover; killing one enemy; taking a few hits from the ultra accurate AI; cowering behind cover until your health has regenerated; being interrupted by a pinpoint accurate grenade landing on your toes; running to more cover; waiting for health to regenerate and so on! Not so enjoyable in the slightest.
There are certainly examples of where difficulty is legitimately created, even using some of the poorly executed techniques in Call of Duty. Bayonetta's harder difficulties (when unlocked) increase the amount of damage the player takes but this works correctly within the mechanics of the gameplay. As the game's combat is based around avoiding damage, reading the enemies attacks and expertly timing dodges to activate 'Witch Time' (a time slowing ability) the threat of more damage makes it even more vital to perfect this technique. The player then uses the openings created by 'Witch Time' to unleash powerful combos and defeat the enemies without fear of retaliation.
To finish, I would like to look at one game series in detail and how the difficulty levels could be improved to create an enjoyable experience for anyone and a substantial, yet balanced challenge for the enthusiast. That series, is Bioshock. There is no denying that Bioshock is a fantastic game with a rich narrative and strong, tactical combat. The game's difficulty, however, is sabotaged by the generosity of the vita-chambers as with them, death has no penalty. The player could recklessly charge in to every encounter knowing that a vita-chamber would instantly revive them nearby if they should fall in combat. This was fortunately fixed with a later patch and from release in Bioshock 2 by giving the player the option to disable the chambers. Having this option created a far more exciting experience for the challenge seeker. Encounters with Splicers and especially Big Daddies/Sisters had far more tension and encouraged tactical planning with the character's available powers. That's not to say the vita-chambers should be completely removed from the game, having the option to makes perfect sense. Perhaps the game's difficulty levels could be refined with the chamber's use and effectiveness linked to specific difficulty levels.
Easy - a standard playthrough with less powerful enemies and no penalty vita-chambers; for those who are disinterested in the challenge and more keen to experience other elements. Normal - This time vita-chambers come with a penalty; I had a few ideas floating around my head. For example, each use could deduct a small percentage of the player's ADAM. Probably a harsh punishment and could create some horrible imbalance later on in the game if the player died frequently. Maybe a temporary penalty to overall health and EVE may work but the player could simply wait until the deficit faded, thus returning to the hiding behind cover issue in Call of Duty. A monetary price would be the easiest to implement, it is not a vital commodity and would also be logical in terms of the game world.
Anyway, on to hard - simply, no vita-chambers. Enemies could be tougher with just an overall health boost instead of damage increases and penalties on the player. Increased enemy damage is an issue in Bioshock 2 where being reduced to minimal health from a couple of hits on hard is ludicrous considering the player controls a Big Daddy! With just an enemy health boost, the player is required to find effective methods of defeating enemies quickly and without taking constant damage over time instead of being steamrollered in two or three hits. The player would have to utilise all of the plasmids, weapons, research capabilities and environmental advantages the game offers throughout its world. Thus, they master the mechanics of the game with their competence as a gamer; setting up a complicated series of traps, combined with plasmid powers and specific weapons to overcome tough encounters such as the Big Daddies/Sisters or harvest situations in Bioshock 2.
To summarise, the message I am really trying to push is to orient the levels of difficulty around the mechanics of the game. It is not fun to suffer through a game on the hardest difficulty when simply a number of sliders have been swung in the opposite direction to create an unfair imbalance against the player. Although sometimes, after all the punishment, multiple deaths and controller snapping frustration; when the boss finally dies...or a section is cleared...and the achievement pops...it was always worth it.