To me, fun is the emotion experienced when a person enjoys what he or she is doing immensely. This is the feeling I get when I play great games. Good games induce 'fun' to a targeted audience.
An example is the popular Dance Dance Revolution, which is well known for its rhythmic gameplay and the addictive music accompanying it. It has an audience of millions of people based on one simple gameplay principle: the tapping of floor buttons based on arrows appearing on screen. This is a game with fantastic design, as it allows beginners and advanced players to enjoy the level of difficulty they prefer, and at the same time have an addictive multiplayer component. Another example of a game that is 'fun' in my book is Mario Kart for the Nintendo DS. It's a racing game that is easy to learn but hard to master. This is because of the skill required in handing the random items given to a player in a game, and the drifting mechanics. Because of the random items system, players can never really master the game, as some of it requires luck. Another example of a game that is 'fun' is the first person shooter, Counter-Strike. I loved playing this game when I was in secondary school, and still do today. It is a game that involves tactical strategy and quick reflexes. The fact that it is multiplayer leads to an array of possibilities for the outcome of a match. Because of the unpredictable multiplayer component, no one can be truly good at the game, and that is why it was so popular back then.
Overall, I believe that for a game to be fun, it must provide a certain degree of challenge to the player; a challenge that can be circumvented within human capabilities and at the same time, a challenge that does not overwhelm the player. Also, a game that is fun must have a certain degree of unpredictability. This would ensure that the player would come back to the game for more FUN!