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Computer games provide a good environment for learning. Players learn to play the game without being taught didactically as the learning process takes place naturally in the virtual world. Learning is no longer a process of knowledge transfer from the expert to the novice. Learners need to construct the knowledge themselves by interacting with the environment. It is beneficial to study the theory underpinning computer games: how players learn and respond in the game environment. We elucidate the theories of learning, i.e. behavioural learning theory, cognitive learning theory and motivation theory in the context of computer games. Psychology provides a way to understand the learning that occurs naturally in games and also helps in developing an environment in which the player can learn a particular domain of knowledge extrinsically. By studying the psychology and its relation to computer games, we can understand players more comprehensively, and thus predict their responses. The understanding of psychology offers a framework to developing an educational game that promotes learning while maintaining high player motivation. We also attempt to shed some light on how players learn in computer games based on the theory, and thus infer better techniques in supporting game-based learning.