Andrew Webster said:
Too Gay for the U.S.A.
Traditionally, Japanese developers haven't shied away from depicting gay and transgender characters in their games. But when these titles make their way overseas, it's a different story. Andrew Webster looks at how publishers have censored gay characters for North American audiences.
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While I'm glad that you've taken the stance against censorship you have, and the stance that you're pro-portraying non-heterosexuals and non-cisgendered people in games without the need to whitewash them or portray them as jokes, etc., I think that some of your examples are hardly championing that cause (or showing Japan as being the respectful enlightened entity that the article implies).
Ash, from Streets of Rage 3, and Cho Anaki are hardly good examples for positive portrayals of LGBT people in the media. I can't say that censoring or removing them entirely is somehow better, but they're about as positive a portrayal of LGBT as giant rubbery lipped blackface people are to race relations.
Granted, in Cho Anaki's case, that's sort of the point of the whole genre, and it's better to get all voices, warts and all than none, but still.