There are three selectable difficulties in Alan Wake, that determine enemy spawns, enemy health, ammo drops and health regeneration. In Alan Wake's American Nightmare (PC version) the only two difficulties are Normal and Nightmare.

Easy/Normal Mode

This is the basic and easiest difficulty of the game. In this mode:

• The Taken take an average of 5 seconds to burn away the darkness.
• The Taken take around 2-5 revolver shots to kill.

The achievement Departure can be earned on this difficulty.

Note: As of the PC version, this is now called "Easy Mode".

Normal/Hard Mode

This is a harder difficulty, but not the hardest. In this mode:

• The Taken take an average of 8 seconds to burn away the darkness.
• The Taken take around 3-6 revolver shots to kill.

The achievement Hardboiled Writer can be earned on this difficulty, it stacks with the Departure achievement.

Note: As of the PC version, this is now called "Normal Mode".

Nightmare Mode

This is the hardest difficulty of the game. In this mode:

• There are more pages of the manuscript to find, only found in this mode.
• The Taken take an average of 10 seconds to burn away the darkness.
• The Taken take around 4-8 revolver shots to kill.
• Only unlocked after completion on Normal or Hard.

The achievement Alan, Wake Up can be earned on this difficulty, it stacks with the Departure and Hardboiled Writer achievements (however, at least one of these achievements will already have been unlocked as the game has to be beaten once to play Nightmare mode).