Back in 1989, Capcom had a problem on its hands. They were about to release “Final Fight,” a beat ’em up classic, but realized they had a potential political problem on their hands: there was a female enemy, Poison, included in the game, and Capcom correctly assumed that punching a woman in the face before bodyslamming her through a table kind of sent the wrong message in early ’90s America.
So they said she was a post-op male-to-female transgender person, because beating them up is so much better and not rife with incredibly unfortunate implications.
It’s kinda haunted Capcom ever since. Of course, it doesn’t help that, instead of just pretending she didn’t exist like a lot of the game industry’s other less-than-PC depictions of gays, they’ve been featuring her as a pole dancer, sidekick, and occasional punching bag ever since, and been more than happy to sell sexy figurines of her. And now, after admitting that she has surgery in the US and just is good at tucking in Japan (which, to forestall any comments, yes, has substantially different attitudes towards the transgendered than the West) four years ago, they’re trying to pretend her gender is nebulous again.
To be fair, though, as depictions of homosexuals in gaming goes, it could have been a whole lot worse.