Both U.S. and South Korean officials insisted the drills are harmless and focused entirely on responding to a North Korean attack.
The heated North Korean rhetoric, along with occasional weapons tests, is standard fare during the spring and summer war games by allies Seoul and Washington, but always uneasy ties between the Koreas are worse than normal this year following weeks of tit-for-tat threats between President Donald Trump and Pyongyang in the wake of the North's two intercontinental ballistic missile tests last month.
"President Moon noted the need to continue sending a clear message to the North that a brighter future will be guaranteed should it choose to come to the negotiations table, while continuously increasing pressure and sanctions on the North", the Cheong Wa Dae spokesman said.
Chief of Army Angus Campbell last week denied there would be any risk to the Australian military personnel participating in the annual Ulchi-Freedom Guardian war games which will run until August 31.
The video released seems to be in reference to this week's joint US-South Korea drills in the region.
The Trump administration on Tuesday imposed sanctions on 16 mainly Chinese and Russian companies and people for assisting North Korea's nuclear and ballistic missile programs and helping the North make money to support those programs.
Microsoft Offers Huge Xbox One X $200 Discount to Fans
Microsoft's made the most powerful games console in the world and it costs a whopping £449 (RM2470). On the other hand, Microsoft is willing to offer a $100 discount for the standard Xbox One model.
China called on South Korea and the United States to suspend the joint military drills as the two nations began annual war games. Just few days back, the United States and North Korea had exchanged bitter words and warnings to annihilate each other with nuclear weapons. The allies have said the drills are defensive in nature.
It's nearly certain that this year's drills will trigger some kind of reaction from North Korea.
Mr Kim said North Korea would conduct the planned missile launches if the "Yankees persist in their extremely unsafe reckless actions on the Korean Peninsula and its vicinity" and that the USA should "think reasonably and judge property" to avoid shame, the news agency said. The question is how strong it will be.
Tokyo is seeking the return of kidnapped Japanese citizens that Pyongyang says are no longer in North Korea custody.
But others think the North might use the drills as an excuse to conduct another ICBM test or maybe even act on its threat to lob missiles into the waters near Guam.
As a result of Tuesday's action, any property or interests in property of the designated persons in the possession or control of US persons or within the United States must be blocked, and US persons are generally prohibited from dealing with them, the US Treasury Department said in a statement.