Game characters in their birthday suits? Shocking! Tom's Hardware Guide takes a moment to point out that Grand Theft Auto: San Andreas isn't the first video game to offer up glimpses of your favorite pixelated pals in the buff. Be aware that there is computer-rendered nudity in this linked article; plenty of virtual women are on display and you can clearly see all 64 of their bits.
Ritual, while making the [Max Payne] sequel, obviously had a little time to kill and created a nude skin for the female lead Mona Sax. Actually it's not all that dubious: it's the skin used for her model in the shower scene. But it's not hard to change to the skin in the game, though you might lose your guns - not something you want to happen in Max Payne. Besides, the man has enough on his mind, doesn't he?
Just as movies evolved to the point of including nude scenes (purely for the sake of storytelling, of course) video games are bound to evolve to that point as well. I have no issues with a game developer including a naked character if the inclusion is for a distinct reason. Except for Mario. That would just be wrong. Good luck getting that image out of your brain.
One thing is for sure though. We cannot allow people to play games starring a naked character. There's already a danger of gamers going on a game-induced violent rampage, but could you imagine the horror if gamers went on a naked game-induced violent rampage? I think we can all agree that isn't something that we want to see (for more than one reason).