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Putting aside the fact that gamefreak doesn't care about the quality of their games, how could pokemon be made actually challenging without fundamentally altering how battles work? I can't remember if all pokemon gaves were this easy but I made it to the sixth gym of shining pearl using nothing but my starter.
One thing that could work is limiting the amount of pokemon you can hold in your party early on so you can't just beat every trainer with sheer numbers, though it wouldn't fix the problem of overpowered starters. Another idea could be to have the trainers you battle scale based on what level/types your pokemon are.
Any other ideas to make the games more challenging or fun?