Researchers from the Queensland University of Technology (QUT) in Australia also found that playing video games as a family can help parents build stronger relationships with their children.
Dr Daniel Johnson, the director of QUT's Games Research and Interaction Design Lab, along with his gaming research group at the Young and Well Cooperative Research Centre (CRC), combed through 200 papers and reports from around the world to find out when and how video games can have a positive effect on the wellbeing of young players.
Their research challenges the belief that video games breed socially isolated, aggressive and lazy teenagers.
"Our research showed that playing video games can improve a young person's mood, help them reduce their stress levels, and promote feelings of competence and autonomy," said Johnson.
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"Playing video games with others in particular increases a person's brain activity, improves their social wellbeing and helps them feel more connected with others.
"If you're trying to reach out to the teenager in your house, spending time with them playing a cooperative video game you both enjoy could be the bridge you're looking for - and you'll likely feel the same positive impacts on your wellbeing, too," he said.
Researchers found that moderate (non-excessive) levels of playing are associated with positive emotions and improved mood, improved emotion regulation and emotional stability and the reduction of emotional disturbances.
Playing video games can be a healthy means of relaxation, stress reduction and socialising, researchers said.
People who play video games in moderation have been shown to have significantly less depressed mood and higher self-esteem compared to those who don't play or who play excessively, they added.