is this game overtuned

I never played the game when it came out originally but there's parts where I have to turn the difficulty to the easiest and even then I am having to use every healing spell and potion, like the bandit camp for example. I was level 2 and 3 party members.
I really don't like having to just go to lowbie areas and "grind" mobs to level, I don't like to use cheese modes to win like kiting either.
Just seems like most D&D games start off like this as very unbalanced, temple of elemental evil was kind of similar in ways, you couldn't even do the first area with your pre-created characters and had to hire a higher level npc.
I really don't like having to just go to lowbie areas and "grind" mobs to level, I don't like to use cheese modes to win like kiting either.
Just seems like most D&D games start off like this as very unbalanced, temple of elemental evil was kind of similar in ways, you couldn't even do the first area with your pre-created characters and had to hire a higher level npc.
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As for Temple of Elemental Evil, I played through the entire game without ever hiring an NPC to fight for me, without turning down difficulty, and that includes killing the Balor in the fire node.
Based on your comments I assume your tactics need work. Learn your teams strengths and weaknesses, learn how to engage the enemy (let them come to you), and make sure you use your spellcasters well, a sleep spell is often worth far more than a fireball. Baldur's Gate era games generally were far more difficult than contemporary games. Learn to manage.
You don't have to grind mobs in this game but you really do have to grind exploration, if you want to help yourself out.
It also sounds like you've either missed, turned down or lost some NPCs to help you out, to get where you are you've probably already been past 8 or 9 of them.
This isn't the easiest game though when it comes to combat if you're new to it as there are a lot of things to consider, I wouldn't worry about what difficulty level you are on.
I get by with a tank, a healer and an extra character like an archer or thief. I prefer a smaller group because I can manage them equally. I used to have characters that double up in their function, like two clerics or a thief and a mage when really what I wanted was a bard. Not to mention that some NPCs in this game are just not beginner friendly especially the notorious Garrick.
The thing about Baldur's Gate is that part of success really depends on your play style. Some people can storm into dungeons with heavy hitting tanks or mages. While others prefer stealth tactics with backstabbing thieves or slow tactics of attrition. I get by in the Bandit Camp by leading the outer forces away from their allies to cut them down. Slowly moving inwards to finish off the stronger foes.