I have found that padded bags containing video games are too thick to go as a larger letter.   The only way around this, that I know is to use a manila envelope or like an Australia Post tough bag that doesn’t have the bubble wrap lining inside.  Personally I don’t like sending games this way, because they have no protection around them and are easily damaged, plus you don't have a tracking number.

I personally use a small box, put the game in a plastic bag and seal, then some bubble wrap around it, and if need be some paper so the game won’t move around in the box.   You can usually pick up small boxes from places like Bunnings for free, if you don’t have any.  Also if you search “500g satchel boxes” on Ebay you might find something suitable.   This goes as a large parcel for $7.45 or $7.15 if you use the Ebay/Australia Post satchels.   I know it’s around $4.00 to $5.00 more expensive to do it this way, but you have peace of mind with a tracking number, and not the worry of it getting damaged in the mail or the buyer saying they never received it, when they did.

Or you can just give the buyer the option, for example $4.00 postage sent a tough bag; or $8.00 postage (with a tracking number) sent in a box.

I have found that most of my buyers are happy to pay the extra just so they can have a tracking number, especially when the games are expensive.