timppu: 3. No difficulty levels. Don't make me try to guess at the start of the game which difficulty level is the "right" one for me, how am I supposed to know that? I can tell only after I have played the game extensively. In some games the hardest difficulty is easy-peasy, in others the medium difficulty is very hard.
Rather, design the gameplay so that you don't need to choose that, but you can compensate for your lack of skill by the way you play the game, ie. advancing more cautiously. Slapping difficulty levels into a game can be a sign of lazy game development so that you don't have to optimize the gameplay as described above.
Yes this can be done, lots of games have only one difficulty level, e.g. Super Mario Bros, Dungeon Keeper, Magic Carpet etc...
Why is having the *option* to make the game harder or easier a problem?
What's wrong with having a game default to the difficulty that the game was designed around, but having the option to change the difficulty from there?
(Specifically, the game could be designed around a certain difficulty, and that difficulty would be the default (the one the cursor is on before you move it), but the other difficulties would still be there for those who want more or less challenge.)
Also, Super Mario Bros. actually has 2 difficulty levels. Once you beat the game, you are returned to the title screen, with the option of selecting the world you want to start in. Wherever you start, however, you will be playing the game on hard mode, with such changes as:
* Goombas are replaced with Buzzy Beetles
* Moving platforms are smaller
* There are some cases where two levels are identical except for some minor changes to make things harder. (For example, 5-3 is 1-3, but with bullet bills.) On this hard mode, the first stage of each pair is now as hard as the second. (So, in this example, 5-3's bullet bills are added to 1-3.)
* I think there might be an increase in the speed at which enemies move, as well.