Controversial video game Grand Theft Auto V could desensitise younger players to extreme acts of violence and cruelty, the Office of Film and Literature Classification has ruled.

New Zealand's classification watchdog released its report on the R18 game to the Herald on Sunday this week; just days after two of the country's largest retailers, the Warehouse and Noel Leeming, pulled it from their shelves.

Despite the game offering "unlimited possibilities for rampant acts of extreme violence and cruelty", the office did not ban it outright because, it concluded in the report, adults would still have the maturity to play it without being negatively affected.

Among the game's strongest material, the Office said, was when one of the lead characters "Trevor" - a possibly psychopathic drug dealer - tortures a man in order to gain intelligence to be used in an assassination attempt.

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"The techniques are water-boarding with gasoline, tooth extraction with pliers, battery with a wrench, and electric shock treatment," the report said.

It added that the torture, cruelty and violence were moderated to a degree by the over-the-top satirical nature of the game and because they focused on character development.

Other aspects of the game cited by the Office included Trevor smoking a crack pipe, another character using a water bong, players having the ability to commit suicide, and numerous acts of sex and extreme violence.

However, "there is never any sense that it promotes or encourages criminal behaviour outside of game play," the report said.

It found the game to have artistic merit in terms of its visual design and storytelling, calling it "an immersive and sophisticated interactive game centred around characters with violent criminal lifestyles".

Office advisor Michelle Baker said it was a high test before a publication was banned in this country.

In order for that to happen, it to appear to promote or support acts including child abuse, torture, necrophilia, or sexual violence.