One of the earliest examples of this censorship comes from the 1989- Capcom's beat ‘em up Final Fight characters Poison and Roxy acted as mini-bosses from the rival gang. When localising the game in the US, concerns were raised around men fighting women, in a pre-emptive response to this backlash the creators announced that Poison and Roxy were actually pre-op trans woman (therefore men in the eyes of the ignorant) using concept art that used Japanese slang for trans women as evidence. In a recent interview developer Yoshinori Ono stated "Let's set the record straight: In North America, Poison is officially a post-op transsexual woman. But in Japan, she simply tucks her business away to look female." Putting aside the less that favourable language surrounding this character, and the unintentional nature of Poison’s identity, LGBTQ+ fans have adopted Poison as she continues to crop up in Street Fighter games, making her an early trans icon in the gaming community.
Similarly, Streets of Rage III mini-boss, Ash, an archetypical leather daddy in chaps who would fit right in with The Village People, was censored from American releases of the game. While the character was a rather unflattering stereotype of gay men, I imagine the reason he was censored from the game wasn’t to prevent offense to the gay community, rather to defend the children from witnessing the majesty of this flaming homosexual. Some of the most infamous examples of this censorship actually stem from the family friendly face of Nintendo. The Pink Yoshi-adjacent Birdetta (formerly known as Birdo) has become a bit of an internet urban legend after her appearance in Super Mario Bros 2 was accompanied by this flavour text in the English manual:
Obviously, this is meant to be a joke at the expense of the egg-spitting lizard, utilising transphobic tropes of gender confusion for cheap and (by modern standards) offensive laughs. While the topic of her gender has cropped in Japanese material here and there, it has never been mentioned in English again. Strangely, Nintendo chose to keep this character around, rather than burying her in the past like other controversial characters, treating her as a cis woman in every subsequent appearance. While Birdetta is certainly the most famous example of Nintendo's interesting relationship with gender, there is another example I believe deserves more of a spotlight. Paper Mario: The Thousand Year Door (2004) introduced the first entirely purposeful transgender character in gaming that wasn’t treated as a joke (yes, the bar is that low). Vivian is the youngest sister of the three Shadow Sirens and while initially acting as a villain, she joins Mario’s team after admitting that he is the first person to treat her with kindness. In the Japanese version of the game Vivian’s elder sisters bully her by misgendering her and referring to her as a “cross-dresser”. In contrast to these villainous characters however, Mario, his band of heroes and any neutral NPC’s refer to Vivian with she/her pronouns and are entirely respectful of her gender. The Italian translation of the game even has her exclaim “I’m proud to have turned into a woman!” in retaliation to her sister’s transphobia. As you might have guessed from the rest of this article, Vivian’s trans identity, her journey of building self confidence in that identity and all the positive representation this could’ve provided to the children of the English-speaking world, was entirely removed from the US and UK release. It goes without saying that these archaic "decency" clauses that censored so much queer content from early video games set the industry back decades in terms of representation, and it is down to modern developers to make up for lost time, and of course, Nintendo needs to bring Vivian back to the Mario universe in all her glory.