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Flow refers to how players naturally move through the level as their needs change, affected by the navigability of the environment and item placement. Flow is closely related to multiplayer map balance, and is usually discussed in a generalized context in relation to the level layout.
Flow is affected by the environment. A high platform offers an advantage over a lower area, as moving back from the ledge gives instant cover against most weapon types. Naturally, this attracts players, causing them to look for higher points and avoid area's where they will be at a disadvantage. On a lower level, a level can encourage flow by keeping paths easy to navigate. Details and props can guide the player, but they can also hinder movement when placed carelessly. Most players don't like getting stuck between a barrel and a teapot.
Item placement is also an important factor. A strong weapon attracts players that want some more firepower, just as a health pack attracts wounded players. Obviously, this depends a lot on the current need(s) of each player.
The complexity of a level matters as well. A map can have a great potential flow, but if it's hard to learn, it may turn out to feel unbalanced simply because players can't remember the location of vantage points or items.
Areas with good flow are attractive to players. They are easy to navigate, and/or offer tactical advantages such as cover, weapons, and so on. The player should feel 'comfortable' moving around these areas.
Areas with bad flow are unattractive to players. They are uncomfortable to move around, offer little to no advantage (and in some cases cause disadvantage) and are generally avoided by the player. Areas with bad flow can have a trade-off, such as good items.
Having bad flow as a result of bad map design (e.g. careless prop placement) is not good.
Note that slower, stilted player movement ("bad flow") is not necessarily bad. For example, by placing a powerful weapon in an area with poor flow, a designer can associate risk and vulnerability with the possibility of a reward to create tension.
Also note that different players like different kinds of flow and pacing. A map that forces players to flow can make the action quite fast-paced, while a map that's less strict on flow may appeal more to tactical players. Also, a lack of flow doesn't mean the map is boring or not fun by definition. It may make the map more predictable, but even that doesn't seem to be a bad thing for every player.
- Multiplayer Level Design In-Depth, Part 2: The Rules of Map Design - Although written in context for Splinter Cell, it provides a very accessible analysis of flow and layout for first-person multiplayer levels in general.