The best way to help improve our ability to talk about games and game development is to develop ways to discuss games in a more detailed manner. Labeling games, in general, as fun ends up hindering the ability of someone else from responding or gaining anything from such a description. Obviously the most important part of a discussion is the back and forth. In order for this exchange of ideas to happen, the right information needs to be portrayed. This information that you need to put forth consists of many different aspects of the game such as story, theme, mechanics, dynamics, aesthetics, target market, flow, difficulty, design, and development process. When someone uses the word fun to describe a game, more than likely they are describing what the game makes them feel. While fun has many different meanings to many different people, what most people mean is that the experience provided by the game makes them feel happy. Games should of course continue to give people these wonderful experiences, but games have a much greater range than simply just that.
Regardless of what your opinion on "serious games" or "art games" is, I can't imagine you haven't had an experience with a game that was more meaningful than simply entertaining yourself for a few hours. Personally anytime I get together with a bunch of friends to play a game, I have a wonderful time. My experience when I play games with friends is, of course, much more involved than simply providing me with a few hours of entertainment, because I'm playing with friends. It provides an environment for my friends and me to further bond and share an experience. Looking at it a different way, when you play a sport or watch one of your favorite sport teams you are likely having fun. If you or the team were to win a big championship you would of course enjoy that experience as well, but I can't imagine that the word fun would describe the full range of emotions that you feel when the buzzer sounds and you find yourselves the winners of an important game. One more way, but in no way a final type of experience you can have, is playing a game that allows you to fully express yourself without fear of social repercussions. Games, for many people, are a way to explore who they are and how to communicate with others while safely being behind the shroud of an avatar. For people that use games in that manner, I'm sure the experiences while entertaining are far more important to them than the word "fun" would describe. For all of the experiences that you can have in a game, words like engaging, entertaining, and compelling are much more suited to helping describe games. However, while I bring up the problems with fun and what could be considered more appropriate words, what will really help is not trying to find a single word to describe games.
Games, while currently seen as a commodity to many, are complicated pieces of entertainment that can be used for purely entertainment purposes, to educate, to help someone cope with something, to explore an idea, or combinations of them and a variety of others. With how many ways you can apply games there will never be a word that encapsulates the full range of applications that games have. What will ultimately help communication between the areas of game development as well as between developers is making sure you can put forth your ideas in a way that people can understand as well as making sure you understand what people are saying back.
This problem with fun is merely a symptom of the problems with language and what many would consider cultural differences. I don't have an answer, nor should I try to come up with one, that generalizes this problem and tries to fix it. However, a solution to this that won't necessarily fix it, but instead help it, is to continue to discuss games anytime you can. During these discussions make sure you try to gain something from them by taking the time to adequately describe your position and absorb the response. Make sure that when someone responds to you that you fully understand their point of view before responding and if you don't understand, make it a point to try to. To some of you, this might sound like the most obvious series of statements someone can make, but I bring it up because far too often I will see really bright people not speaking up because they're worried that what they have to say might be considered invalid. While there are mistakes to make during a discussion such as simply interrupting someone or using a word incorrectly, discussing your point of view is always valid and never a mistake. The reason being is that discussions are really just an exchange of ideas, both good and bad, that will ultimately uncover an idea that adds to the ability of the people involved or the concept at large.
What is Fun? by Lauren Vespoli
Deep Thoughts: Why Games are so Weirdly Fun by Brian Hertler
"Fun" is a Four-Letter Word by Warren Spector
Starting Again - Part 1: Problems With The Word Game by Darren Tomlyn