A method of determining an adaptive early skip indication (ESI) threshold during block motion compensation encoding of digital video data is disclosed. The method includes setting an ESI threshold minimum value below which no degradation in the block motion compensation encoding occurs; setting an ESI threshold maximum value above which degradation in the block motion compensation encoding is considered unacceptable; determining that a processor load state of the processor during block motion compensation encoding is one of an overloaded state, a normal loaded state, and an under loaded state; when the processor load state is determined to be in an overloaded state, increasing the adaptive ESI threshold to a value below the ESI threshold maximum value thereby decreasing a number of macroblocks in the digital video data that are block motion compensation encoded; when the processor load state is determined to be in a normal loaded state, maintaining the adaptive ESI threshold at its current value; and when the processor load state is determined to be in an under loaded state, decreasing the adaptive ESI threshold to a value above the ESI threshold minimum value thereby increasing a number of macroblocks in the digital video data that are block motion compensation encoded. A block motion compensation encoding devices is also disclosed that implements the method above. A computer readable medium is also disclosed that stores instructions, which when executed by a processing unit, performs the method above.