My default is one level above Normal. If there are 3 levels, then I play on the hardest. If there are 5 levels, then I play on level 4, etc.
The problem is, some games handle harder levels of difficulty better than others. Here are some games where I will -not- play above normal and why:
Uncharted: Hard just means every bad guys takes more damage (2 head shots). I ran out of ammo constantly just trying to kill everyone in the room (which is often a requirement to progress).
Persona 4 Golden: Battles become harder but XP earned actually goes down.
Ninja Gaiden 2: Has two difficulty levels, Easy and Normal. Normal is actually really freakin' hard and makes the game a frustrating mess for a first time player.
Bioshock Infinite: 1999 mode seems pretty pointless. I did play on Hard the first time through, but this made the Handymen a huge chore as they absord a ton of damage and are very difficult to stun.
Games that change enemy placement and/or tactics, item avaialbility, etc are games where difficulty levels make a difference in a good way. Games that just increase enemy health bars/damage may as well not even have difficulty levels.
-Byshop
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