Tesla did not immediately comment. NHTSA said it "will evaluate aspects of the feature, including the frequency and use scenarios of Tesla 'Passenger Play'."
The agency noted earlier in December that distracted driving accounts for a significant number of U.S. road deaths -- 3,142 in 2019 alone. Safety advocates have said official figures underestimate the problem because not all distracted drivers admit the issue after crashes.
The Times said the Tesla update added three games -- solitaire, a jet fighter and conquest strategy scenario -- and added vehicles have warnings reading: "Playing while the car is in motion is only for passengers."
The Times reported that a button asks for confirmation that the player is a passenger, though a driver could play simply by pressing the button.
The Governors Highway Safety Association said on Wednesday it was pleased with NHTSA's Tesla safety investigation "and want to remind all drivers to be alert and focused on the road when you're behind the wheel."
In 2013, NHTSA issued guidelines to encourage automakers "to factor safety and driver distraction prevention into their designs and adoption of infotainment devices in vehicles."
The guidelines "recommend that in-vehicle devices be designed so that they cannot be used by the driver to perform inherently distracting secondary tasks while driving," the agency said.
The agency in August opened a safety investigation into 765,000 Tesla vehicles over its driver-assistance system Autopilot after a series of crashes involving the system and parked emergency vehicles.
A preliminary evaluation is a first step before NHTSA decides whether to upgrade a probe to an engineering analysis, which must happen before the agency can demand a recall.
NHTSA said it received a complaint in November about the game feature from a Tesla Model 3 driver in Oregon, who said: "Creating a dangerous distraction for the driver is recklessly negligent."
On Nov. 29, Daimler's Mercedes-Benz recalled 227 U.S. vehicles -- 2021 model year S580, 2022 EQS450, EQS580, and S500 -- because the vehicle infotainment systems "might allow activation of the television and internet display while driving, causing a distraction for the driver."