• We have updated our Community Code of Conduct. Please read through the new rules for the forum that are an integral part of Paradox Interactive’s User Agreement.
I'm starting over again, and this time, I want to know what the difficulty level actually represents. Harder AI? Or just bonuses / penalties to AI stats / income / heroes / whatever?

Sorry to say I do not know. Most likely it is similar to Total War style games were high difficulty simply means more enemy morale, or more enemy money etc.
 
Mana of enemy:
Very easy - 0.4
Easy - 0.5
Normal - 0.75
Hard - 1
Very Hard - 1.25

Hit points of enemy:
Very easy - 0.4
Easy - 0.5
Normal - 0.7
Hard - 1
Very Hard - 1.2

Damage of enemy:
Very easy - 0.4
Easy - 0.5
Noraml - 0.7
Hard - 1
Very Hard - 1.2
 
Does it have any impact on the strategic game? I'm finding the actual battles on normal pretty straightforward with an even match-up, and can take down foes 20-30% stronger without too much trouble either (as the modifiers above suggest I should), but the other players can out-produce me to a ridiculous amount and level up their units/forces with ease (I think East or West Mercia was able to support a larger military than me, despite me owning all of southern England, Glastonbury and Virconium!)
 
The below settings apply to battles you fight on the tactical map. For example, I did the first tutorial combat on beginner with 1 man being lost, and lost 110 on very hard with almost identical strategy. (Note that the first battle will give you a final result of 0 men lost regardless of how many you lose on the tactical map).

Auto-Combats are resolved without being impacted by the difficulty level. I think auto-combats are automatically the equivalent of hard. A human player on the tactical map should always do better than the auto-combat.

Annual income is also affected by difficulty level. For example, in late game, I had 70k gold income on beginner and 40k gold on very hard; with 96k food on beginner and 58k food on very hard. You can see this for yourself. Just save your game, then run 4+ turns so you can see a complete winter cycle on one difficulty setting, then return to the save game, and run the winter cycle on the next difficulty level and compare your income levels. Expenses should be same on both difficulty levels, its just income that is different.

In addition to impacting your ability to pay for your armies, I think difficulty level may impact how much recruiting you can do in a province (i.e. how many turns you wait for a military unit, but I'm not sure).

If anyone has seen any other impacts of the difficulty level, please let me know.

Mana of enemy:
Very easy - 0.4
Easy - 0.5
Normal - 0.75
Hard - 1
Very Hard - 1.25

Hit points of enemy:
Very easy - 0.4
Easy - 0.5
Normal - 0.7
Hard - 1
Very Hard - 1.2

Damage of enemy:
Very easy - 0.4
Easy - 0.5
Noraml - 0.7
Hard - 1
Very Hard - 1.2