Your friend was likely fairly sure you knew it was game play. He probably wasn't positive though, due to the subtlety of your words, "I thought that was a real soccer match, lol." You never actually stated that you knew now that it was game play. It is certainly implied in using the past tense "thought" and the final "lol", but not made concrete. Just to make sure you understood, even though he probably suspected you did, he repeated that it was his game play. It was just one of those awkward situations that people have sometimes when communicating.
A way you could have made yourself more clear was as you did with us.
- Wow, for the first few seconds your game play looked like a real soccer match!
- (friend now can reply) I know, right!?
This time it is clear that you initially misunderstood what you were seeing, but you soon realized it was a fantastic looking game.