This is part 1 (modified) of the literature review for my current research. Here ya go :) 
 

When we play a game (electronic or otherwise), we enter into what Johan Huizinga calls the “magic circle”. The magic circle can be a visible or invisible boundary within which the real world and play are delineated (Huizinga 1950). Inside the magic circle, we are constricted by rules that constrain or free players to act differently than in the real world. For example, when you play basketball, you act differently than normal because you are constrained by rules that don't exist outside of the basketball court. You also do things within the 'magic circle' that you wouldn't do outside the game (such as try to put a ball through a hoop, or mine a planet for some sweet Element Zero).  

 Huizinga also defines play as something that is special, and done for fun; displacing play from everyday life. Although Huizinga’s book ‘Homo Ludens’ is seen as one of the seminal works for anyone talking about the ludic, it has come under criticism. Daniel Pargman has pointed out that the magic circle “lacks specificity” (Pargman and Jakobsson 2008). He argues that because the lines between play and non-play are blurred, a hard line cannot be drawn between the two. The solidity of the boundary drawn by the magic circle has also been called into question by Edward Castronova, who argues that the membrane of the magic circle is porous, and that “rules of play inside and outside influence one another, with unpredictable results for both” (Castronova 2006). Eva Nieuwdorp also points out that Erving Goffman described the phenomenon in his 1961 essay Fun in Games. Nieuwdorp argues that when Goffman talks about how the barrier between externally realized properties (games and game-like experiences) and the real world is more like a screen than a wall; and that it not only selects, but also modifies anything that passes through it (Nieuwdorp 2005).

When we play games, we not only engage in rules that apply to the virtual environment exclusively, but we also bring elements of the real world into the virtual world wth us. Not only do rules and elements of play cross the lines of the magic circle, but they also influence one another. Elements of the real world leak into virtual environments by way of the game designers. Game players take what the game designers have made from the game to the real world, transporting norms and other cultural artifacts with them through the membrane of the magic circle.