The aim of this study is to assess the impact of a 3D educational computer game on students' test anxiety and exam performance when used in evaluative situations as compared to the traditional method of examination. The participants of the study were students in tertiary education who were examined using game‐based assessment and traditional assessment in a 2 × 2 cross‐over design. The game was flexible, providing the instructor with the opportunity to import and edit exam questions and modify several aspects via an administration panel. Following the collection and analysis of both quantitative and interview data, it was revealed that the students' test anxiety was reduced during the game‐based assessment. Furthermore, the exam performance of the students was significantly better when the game method was used. The results showed that there is a linear negative relationship between the students' test anxiety and exam performance as well as that these variables are correlated in a causal way. Overall, this study provides evidence that game‐based assessment could be potentially beneficial for students.