Came across this great diagram in a presentation from Ami Jo Kim on the economics in online games.
The implied two-by-two matrix defines so much of what happiness means in life: when the challenges we face are high enough to match our skills (and vice versa) we are in a state of flow. Otherwise, we are anxious, apathetic, or bored.
Said in another way, to be happy find a game worth playing, and play it.

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