Presence is the psychological experience of feeling that one is in a virtual space rather than observing it — sometimes called the “being there” feeling. It is most studied in VR research but applies to any game that creates a strong sense of inhabiting a place.
Distinct from immersion: the two terms are commonly conflated but describe different experiences. In VR research (Slater), presence is perceptual — the convincingness of the physical space. In game design (CRE133), presence is subdivided into spatial presence (the environment feels real), social presence (other agents feel real), and self-presence (the avatar feels like one’s own body). Immersion, by contrast, describes absorption in narrative, strategy, or challenge — it is cognitive and emotional rather than spatial (CRE133 Lectures, see source-cre133-lectures).
In VR, Slater distinguishes place illusion (the sense of being in a real place) from plausibility illusion (the sense that events are really happening) — both contribute to presence (Steinicke 2016, see source-being-really-virtual).
Related: presence-and-immersion, virtual-reality-fundamentals, game-feel, proxied-embodiment, diegetic