Video games have a long and odd history when it comes to the topic of Gay and Transgender video game characters. From the early days when Nintendo and Sega had rules in place that prevented anyone to release games that had Gay or Transgender characters in them, because it was deemed objectionable and offensive, to their gradual inclusion as Homosexuality and Lesbianism became more widely accepted by society as a whole. While still largely ignored, Gay and Transgender video game characters have slowly become a growing and accepted aspect of video games over the few years this young industry has existed.
Unfortunately, even today characters that are Gay or Transgender are still largely being used as nothing more then joke characters to be made fun of or are included in games as nothing more then comic relief. An example that may be more well known amongst this community would be that of Kanji from Persona 4. He is picked on the entire game by his friends for being sexually confused, and many times his sexual confusion was the brunt of on going jokes throughout the entirety of the game. While no longer pretending Gay and Transgender people don't exist is obviously a good first step towards acceptance in the medium, most games still use Homosexuality, Lesbianism, Cross-Dressing and Transgender characters as nothing more then a joke to be used in stereotypical ways that could best be likened to the way minority roles from the early days of the film industry were almost always offensive stereotypes that were rarely treated as anything but comic relief to the "normal" white characters.
While my expectations to get a serious discussion on this site going are almost non-existent I'm hoping the community can show some maturity for a change and give the subject an honest discussion and have people talk about their thoughts on the matter, and to at least get a few pages in before this gets derailed and locked by the usual forum trolls.
So what are your thoughts on how Gay/Cross-Dressing/Transgender characters are portrayed in modern video games? Do you think it's fine the way it is, or does it still need some work?