What kind of challenge would you like to be present in video games? Would you like one that tried to kill you?
haha. no. it's the quality of interaction.
say there's a group of bandits holding a bridge. Your character has a rifle and stats determine if you're a good shot. depending on your human twitch skills plus the character's skills: so you interact with the bandits, and you decide which part of the body you want to aim at, whether you pull the trigger when they move or when they stand, whether you stand or crouch, and so on. These are factors that increase the difficulty here and you take them in consideration. These are a challenge.
Now, these video updates and the codex forum goers here squabble over these little tactical factors, body parts, skills, stats, movement, whatever, and the balance of it all. This is the level this game, Pillars of something, is, i guess.
interaction, or challenge, in this bandit scenario is limited to characters, maybe even the ground asperities, but it's a bubble that encompasses small things and you assume death is the objective.
So, what if: without letting the player know it directly, close to the bandits' camp there's an item locked in a chest which you can open learning the code from, whatever, the backpack you noticed lying on the grass; the item is too dangerous or precious for them to risk it, who knows, maybe their deity, maybe a radioactive bomb, and so if you show it to them they won't shoot you and you can have them drop their weapon and leave the bridge. What if: you can have an alarm sound in a nearby outpost that will attract them away. What if: you can poison the water and they drop dead drinking. What if: if you wait till night-time you can unlock a new quest because a bandit during his night watch wants to leave the bad guys so he'll help.
Now, with these new objects, which are only examples, the challenge "bubble" has expanded. There are many things you can interact with to get better "score". But maybe even more can be done. We just considered items. To go back to the bandits, not only may you interact with skills and items, but maybe you can interact and consider the story and plot of the game so far, and make predictions, because in this case you can interact with the whole story, and the story can end BADLY if you don't choose well. For example you don't want to kill these bandits because later they can help when you overthrow the government or something.
Now the bubble encompasses the whole world. You interact with "everything": the challenge is enormous.
So again, where's the challenge in this here game?