This article explores the intersections between drama and digital gaming and the educational possibilities for literacy of both. The article draws on a model for the educational uses of digital gaming and three case studies from the Australian Research Council funded three and a half year project, "Literacy in the digital world of the twenty first century: Learning from computer games". This model theorises the scope of the possibilities for literacy outcomes from the usage of computer games. The article describes how the model works, and then applies the model to drama education, specifying some new ways of thinking about the literacy outcomes from drama education. Process drama is theorised as the creation of text-in-action. (Contains 2 tables, 1 figure, and 2 notes.)