It is pretty difficult. But you are rewared once you pass the difficult parts with a.) knowing how to get past that past, and b.) new items or souls (use souls to buy/build in this game). It is pretty amazing. Think zelda on NES. It is a huge open world for you to explore, and find out the mythology behind.
On the flip side, there are often ways around the difficulty by grinding, or finding better equipment.
I finally remembered that game I mentioned a couple of pages back.. It was a 2008 WII release called 'Baroque'.
The premise is, you start with nothing, you acquire better and better weapons and you die... a lot.. You also start again with nothing and from memory, back right at the beginning of the game.
The reviews of the day even said thinks like, "Do you want to die a lot? If yes, this game if for you."
And guess what? It was released by Atlus..
I'm in the process of hunting this little gem down. If I do, I'll give a brief review if anyone's interested..