After winning the toss and batting first, Australian openers David Warner and Aaron Finch got off to a fine start putting on 113 for the opening wicket, including 24 runs off Kane Williamson's only over with the ball.
That started a run where the pair hit 83 off four overs including 23 off Ronnie Hira's opening over and then another 20 off Jimmy Neesham's first chance with the ball.
Eventually Warner (65) and Finch (47) took mercy on New Zealand an both retired out at the end of the eight over. Anton Devcich picked up New Zealand's first actual wicket two overs later when he trapped Glenn Maxwell LBW for two.
The big hitting didn't stop for Australia as Shane Watson hit three consecutive sixes off Hira before the spinner had him caught by Guptill for 27. Hira finished with 44 for one from two overs.
Kyle Mills picked up some late wickets to finish with 2-21, while Devcich impressed with 1-15 from three overs, but the early damage set up a strong platform for Australia to reach 200 for seven.
"We were chasing quite a big total of 200 and to get close is pretty pleasing but there is also that disappointment factor of next getting across the line when we should have," said Guptill.
"If we put more partnerships together and lose less wickets towards the end of the innings we are going to score big totals.
"It was a low skidding wicket and to score 197 runs chasing 200 was a pretty good effort and that will give us a lot of confidence going into the next game."
After the match both sides played a five over practise game, which Australia won in the third over of their innings.
The Black Caps open their World T20 campaign against England in Chittagong on Sunday morning NZT.
