The flow experience is a state in which people are completely concentrated and immersed in an activity. This positive psychology concept is relevant to both performance and subjective well-being in a range of activities, but it is difficult to measure: the usual methods of questionnaires and physiological measurements are inappropriate for many applied settings and may interfere with the flow state itself. The aim of the present study was to demonstrate the feasibility of a third approach, observation-based flow measurement, by developing and validating the Flow Observational Grid (FOG). The FOG is composed of three dimensions scored by an independent observer: concentration, joy and frustration. The psychometric properties of the grid were assessed in a sample of 50 participants each playing nine short video game sessions. Recordings of the 450 video game sessions were coded by two observers with the FOG, and the convergence between FOG scores and a flow questionnaire was assessed. The FOG demonstrated very good inter-rater reliability, as well as convergent validity with the short version of the FSS. Our results show that it is possible to assess flow using observation-based methods as an alternative to more accurate measures, which may be useful in many contexts where physiological and self-reported measures are not practical.