Dynamic Difficulty Adjustment

The game is designed to be challenging throughout the entire game
Complicated menus are meant to be avoided (Players will not need to select a difficulty)
Game is a new genre where a player will not be able to select the desired difficulty because it is unknown
Keep in mind, some players like to beat a game on a difficult level for "bragging rights". Removing difficulty levels could take away from this

Solution

Adjust the difficulty of the game on the fly according to the player's ability

As the player progresses through the game, the game can change the difficulty in order to keep the game challenging instead of the player selecting the desired difficulty before the game starts.

The adjusting of the difficulty can and has been done in several different ways. One method is to provide the player with power ups because he is not doing that great. In Mario Kart, players who are behind in the race, will be given better power up. If you are in last place, you can get the lightning bolt which will cause the other players to slow down giving you a chance to catch up.

Common in racing games is the so called "rubber band effect". This is where if the player is behind the computer players, the computer will slow down the leaders so the player has a chance to catch up. If the player is way out in front, the computer controlled players will drive faster. This always keeps the race competitive to the end, but is extremely predictable.

In shooter type games, the difficulty might be increased by making enemies take more hits to be defeated. This technique should be used with caution as it can provide an awkward game play experience. For example, defeating an enemy with 1 bullet early in the first level, and then requiring 20 bullets to kill the same enemy at the end of the first level is strange and it will be obvious to the player that something has changed. Introducing more enemies that are difficult to defeat might be a better way. Also when it is determined that the player is not doing that great, quickly adjusting the hit count in the other direction can be just as strange. If a player goes to fight a boss and has minimal health remaining, the boss should not be easier to defeat than if the player had full health. Helping a poorly performing player might include things such as leaving an extra health pack where there would not be one available to someone who is dominating the game.

Recommendations

Make it transparent to the players. Players should not completely understand the adjustment metrics.
Make it difficult to cheat the system.
Make it realistic.
Make it possible to lose.
Make it possible to win.
Make the adjustment gradually. Sudden changes are bad.
Give the option to turn it off.
Increase the difficulty by making the enemies stronger, not the player weaker.
Do not take away anything the player has already earned in order to make the game more difficult.