Steven from PC Gamer here. I'll be around all day today so if you have any specific questions about the game or my feelings on it, I'd be happy to answer them.
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Sadly, I don't think upping the challenge stops combat from getting repetitive. In most cases, you're going to encounter the same groups of enemies again and again. This game suffers heavily from a lack of diversity and I would've killed for some genre tropes like wolves or something. Even the bane, the big bad monsters, aren't that interesting to fight and swarm you in the same few flavors again and again.
That said, I'm definitely looking forward to going back and seeing how the game holds up on a tougher challenge. There is definite potential there (maybe even room for a post-launch patch). In the final act, the boss battles were a huge challenge that really pushed me to my limits and tested my abilities managing my party. I want to see that more throughout the whole game.
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Part of the reason I dropped it to easy however was an issue with party members not reacting fast enough. I'd give them the order to run away, but they'd fail to move in time.
That contributes to my point that the companion AI can be pretty dumb and hard to deal with. Also had lots of problems like them making terrible decisions on what abilities to use when and pathfinding problems that would sometimes get them killed.
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I think it's not a great idea to tie the AI smartness to the difficulty level because it diminishes the learning curve while making combat less fun. I would way rather have the difficulty doll out handicaps against my opponents on their stats (which it does) but still have to compensate for them actually trying rather than having every encounter turn into a snooze-fest melee where the AI lets me destroy them without putting up much of a fight. That also isn't to mention my larger complaints of the combat being that each encounter is basically the same handful of dudes again and again. It's tiresome.
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In a sense, I totally agree that in a game like The Division, making enemies bigger bullet sponges isn't fun. At the same time, I also think it's kinda lame that everyone I fight on normal difficulty doesn't have any real semblance of strategy or cohesion as a unit. They basically let you kill them one by one, so it's not fun.
https://www.reddit.com/r/Games/comments/5c8172/tyranny_review_thread/#s