Background: Video games and virtual environments continue to be the subject of research in health sciences for their capacity to augment practice through user engagement. Creating game mechanics that increase user engagement may have indirect benefits on learning (ie, engaged learners are likely to practice more) and may also have direct benefits on learning (ie, for a fixed amount of practice, engaged learners show superior retention of information or skills). Objective: To manipulate engagement through the aesthetic features of a motion-controlled video game and measure engagement's influence on learning. Methods: A group of 40 right-handed participants played the game under two different conditions (game condition or sterile condition). The mechanics of the game and the amount of practice were constant. During practice, event-related potentials (ERPs) to task-irrelevant probe tones were recorded during practice as an index of participants' attentional reserve. Participants returned for retention and transfer testing one week later. Results: Although both groups improved in the task, there was no difference in the amount of learning between the game and sterile groups, countering previous research. A new finding was a statistically significant relationship between self-reported engagement and the amplitude of the early-P3a (eP3a) component of the ERP waveform, such that participants who reported higher levels of engagement showed a smaller eP3a (beta=-.08, P=.02). Conclusions: This finding provides physiological data showing that engagement elicits increased information processing (reducing attentional reserve), which yields new insight into engagement and its underlying neurophysiological properties. Future studies may objectively index engagement by quantifying ERPs (specifically the eP3a) to task-irrelevant probes.