The clip showed a young man dreaming about a North Korean space shuttle destroying a city that resembles New York.
But the footage of burning buildings was taken from Activision's top selling game, Call of Duty.
North Korea insists its space programme is for peaceful purposes.
But the country's intent - particularly towards South Korea - has raised concerns leader Kim Jong-un has plans for a ballistic missile system.
The video was posted on Saturday by North Korea's official Pyongyang YouTube channel."
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