This chapter presents digital habitats, a conceptual and methodological framework for analyzing and designing smart appliances in the context of pervasive computing. The concrete topic is a project in pervasive gaming for children. The framework consists of a set of theoretical concepts supplemented by diagrams for representing semiformal models. We give a short overview of selected theories of play and gaming and apply the framework to an implemented simple pervasive game. Finally, we use the framework in a constructive manner to produce a concrete design of a new game. The result is discussed and compared to other approaches. The main points are the following: (a) it can describe communicative as well as material acts plus the way they hang together; (b) it provides an explicit link between human activities and their spatial context; (c) it has an explicit dynamic model that precisely describes the conditions for executing actions; and (d) it offers a typology of participant roles based on linguistic theory, which supports design processes.