I don't think that difficulty plays a bigger role than world building/design and player expression/immersion.

Both Elden Ring and Baldur's gate let players try different builds, different paths, and all of them without feeling wrong or meaningless thanks to its world bulding and world design. This wide array of options let players have different experiences, gets them more into the game and makes them feel like a part of it, those invested players are very likely to speak highly of the game and more sales come from those recommendations (sounds familiar considering XIV case)

In XVI however you dont have that freedom, everything is extremely streamlined and deviating from the main story more often than not reward the players with boring fetch quests. It all makes you feel like tourist that is only there for the story and not a part of the world. This is also where difficulty comes into play because usually difficult battles make the players change their gameplay and develop strategies increasing their investment in the game, BG and ER aren't afraid to challenge you while XVI seems really scared to do it.

I feel that XIV could learn a lesson or two in how ER and BG handle their content, allowing for more player/skill expression in their systems instead of streamlining everything and making sure that not even the lowest common denominator feels slightly challenged