"We know that in gamer culture, from research, there is evidence that in some situations, we can have people with reduced empathy," Shanks said.
The game claims it portrays "Jesus' return to a post-apocalyptic world ravaged by radical socialism and religious fanatics" who try to crucify him.
The video of the massacre has since been banned, along with the alleged murderer's manifesto.
However, Shanks was not sure how to deal with the video game.
"We know that there are tools, widely available, to make these sorts of games very quickly and cheaply by enthusiasts. We also know these people have distribution platforms," he told Newshub.
The developers claim the game is "family-friendly fun" and a "parody" that "does not advocate support or endorse any political group, ideology, movement, entity or individual(s)".
"There's certainly scope for us to call in games of this kind and classify them and potentially make them objectionable," said Shanks.
"In this case, I think we're looking at cheap, very quickly produced games that will be quite hard to track on various platforms, and it may be that these games don't reach the threshold for an objectionable classification. We don't know. We would have to look at each one."
Shanks said parents could help try and stem the problem.
"Parents will potentially find that their children are encountering these games," said Shanks. "That is an opportunity to have actually quite a serious conversation with your child about what they may see and how they can keep themselves safe."
Shanks said his office do everything they could to "stop this sort of content being put up".
