Display data used in display frame generation are compressed for efficient storage in a local memory within a graphics processing unit. The compression technique used is difference encoding and before performing difference encoding, display data in RGB format are converted into YCbCr format. Since the component values of adjacent pixels in YCbCr format typically vary less than the component values of the same adjacent pixels in RGB format, converting the display data to YCbCr format before performing difference encoding improves the compression efficiency.