The game's difficulty can be set to four difficulty settings: Easy, Normal, Hard, and Path of the Damned. Harder difficulties give you more challenging encounters (adding tactical difficulty by replacing weaker enemies with more powerful types or increasing how many are present in encounters. AI won't change based on level of difficulty)[1] and reduce how many camping supplies players will be able to carry at a given time ( 6 on easy, 4 on normal, and 2 on hard and PotD ), limiting the amount of outdoor resting they can do. On average, players will probably get a small increase in loot, but it's possible to get less in certain circumstances.[2]
Easy - The Easy difficulty requires minimal micromanagement an easily forgives mistakes in combat. It is STRONGLY RECOMMENDED for those who are new or recently-returning to real-time party-based RPGs.
Normal - The Normal difficulty requires strategy and efficiency, but forgives a few mistakes in combat. It is NOT recommended for newcomers to real-time party-based RPGs!
Hard - The Hard difficulty is suited for Infinity Engine veterans who are looking for a challenge. Survival requires micromanagement and optimization of stats through items, spells and abilities.
Path of the Damned - In Path of the Damned difficulty, enemies receive a bonus to most stats and encounters have many more enemies. Warning: this option can't be changed in-game! It is only intended for players who want the most punishing encounters!
It is a spiritual successor to Icewind Dale's Heart of Fury mode. All enemies from all levels of difficulty are enabled and the combat mechanics are amplified to make battles much more brutal for everyone involved.
It's possible to switch between Easy, Normal and Hard during a game in progress, so you can always bump it up or down a notch. 'Path of the Damned' is the only difficulty you have to commit to right from the start.