Game Flow

The balance between anxiety and boredom is where psychologist Mihaly Csíkszentmihályi (Chick–send-me-hi) noticed similarities in people enjoying tasks.  He observed these nine characteristics of people in their "flow" (reference):

1. There are clear goals every step of the way.
2. There is immediate feedback to one’s actions.
3. There is a balance between challenges and skills.
4. Action and awareness are merged.
5. Distractions are excluded from consciousness.
6. There is no worry of failure.
7. Self-consciousness disappears.
8. The sense of time becomes distorted.
9. The activity becomes an end in itself.

"The best moments usually occur when a person’s body or mind is stretched to its limits in a voluntary effort to accomplish something difficult and worthwhile. Optimal experience is thus something we make happen." (Csikszentmihalyi, 1990, p.3)

Here's a link to his TED talk.

Here's a short video that talks about how the psychological aspects tie into good game design.