Sometimes a mmorpg character is transsexual by design and at other times, it is a result of a translation error or cultural difference.
People playing a character of the gender opposite to their own has become commonplace in online role playing games, but the practice has extended into console games as well. In a console game, gender-bending characters have been put in at the choice of the designer. The 3 most famous gender-bending video game characters are Poison, who makes one appearance in Capcom's Final Fight, Bridget from Guilty Gear, and Birdo who makes her appearance in the Mario Games.
This gender-bending video game character is a result of a disagreement between designers in Japan and US Capcom employees who realized that having characters beat up a female character may offend the sensibilities of some US players. Poison retained her female appearance in the US version of Final Fight, but got transformed into transsexual. Why this made it okay to beater her up wass never explained, but the US version of the Final Fight game that got released this way and Poison has not appeared in any subsequent US releases.
Fans of Guilty Gear sometimes wear t-shirts or signs that read “Bridget made me gay” or “Everyone is Gay for Bridget.” Bridget makes the gender-bending video game appearance list because in spite of his feminine appearance, Bridget is male. The back story is that Bridget and his brother were born in a village where identical twins were considered to be bad luck. His parents, trying to spare Bridget the stigma of being a twin, raised him as a girl.
Some confusion exists about Birdo due to a translation error of the Mario Tennis manual. Birdo first makes an appearance in Super Mario Brothers 2. The original version of the Mario Tennis manual states that he is a boy who thinks he is a girl and goes on to state that he would rather be called Birdetta.
Later versions of the Mario Tennis manual drop that wording and refer to Birdo as a she. Whether Birdo underwent some kind of sex change, or if the character was intended to be female is not clear from the US sources that are available. It could simply be the result of a translation error that caused Birdo to make this list.
People who have played video games since the days of the 4-bit Atari systems may remember Ms. Pacman. While the graphics for the ghosts are the same, the name of the orange ghost inexplicably changes from Pokey/Clyde in Pacman to Sue in Ms. Pacman.
Video game designers will likely continue to put characters in that challenge traditional gender conceptions. Many of the games are rated T and should not be played by kids, but characters that challenge traditional gender concepts will continue to be a part of video games.