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I think there are other considerations going on here - a game which develops a reputation for difficulty may deter some younger players in particular, or a frustrating experience may make them ignore other entries in a series, so for financial reasons I think a lot of games include this sort of help to stop this happening.

Also I think that for most games which aren't aimed at kids, switchable difficulty is a good compromise which allows anyone to pick their level. However, I do agree that this sort of thing has no place in online MP - you need an equal playing field and also the sense of achievement is (for most games) most valuable in these modes