Many people believe that educational games are effective because they motivate children to actively engage in a learning activity as part of playing the game. However, seminal work by Malone, exploring the motivational aspects of digital games, concluded that the educational effectiveness of a digital game depends on the way in which learning content is integrated into the fantasy context of the game. In particular, he claimed that content that is intrinsically related to the fantasy will produce better learning than that which is merely extrinsically related. However, this distinction between intrinsic and extrinsic (or endogenous and exogenous) fantasy is a concept that has developed a confused standing over the following years. This article will address this confusion by providing a review and critique of the empirical and theoretical foundations of endogenous fantasy and its relevance to creating educational digital games. Substantial concerns are raised about the empirical basis of this work and a theoretical critique of endogenous fantasy is offered, concluding that endogenous fantasy is a misnomer, insofar as the "integral and continuing relationship" of fantasy cannot be justified as a critical means of improving the effectiveness of educational digital games. An alternative perspective on the intrinsic integration of learning content is described, incorporating game mechanics, flow, and representations. (Contains 3 figures.)