But we've long surpassed the "difficulty for extended gameplay" mark, and there comes a point where challenging gameplay does make it more fun. I don't think gamers have gotten younger or dumber (hint: gamers have ALWAYS been young and dumb. You might be 40 now but you didn't start playing games yesterday, you started 30 years ago)
I'm waiting for the company that says "Our new game is really only for smart people who want a challenge, dumb people just won't enjoy it." And guess what? Not only will they captivate the "older, intelligent" audience, but many of the so called "young and dumb" crowd will say "hey...I'm intelligent enough for your game." and even if that's not what they were looking for, many will develop a taste for more complex gameplay, and may become dissatisfied with the "awesome button" mechanics of modern "streamlined" games.
