Until recently, video game depictions of the LGBT community were few and far between. Certain companies like EA have pushed the issue, while others haven't even acknowledged it. In an industry where most of the target audience tends to be heterosexual males, there's no wonder that most discussion of sexuality is done through vague hints and one-off lines. With that said, there have been several franchises that have included openly LGBT characters, one of which may come as a surprise. Super Mario Brothers' Birdo, who made her first appearance in 1987, is credited as being the first transgendered video game character.
Birdo, referred to as Catherine in the original Japanese version, is a pink dinosaur-like bird, whose original purpose was to act as a mini-boss throughout Super Mario Bros. 2. She repeatedly impedes the player's progress, appearing roughly a dozen times throughout the NES game. At the time, players may not have given this enemy a second thought, but the original game's manual revealed that there was more than meets the eye. The entry for Birdo states that 'she' is actually male, but prefers to be called Birdetta. It's also interesting to note that Birdo is often paired with Yoshi, a dinosaur who is identified exclusively as male, but can lay eggs.
Nintendo has largely dropped this controversial subject, and the issue of her gender is rarely discussed. She was given a female voice in Mario Tennis, having been played by Princess Peach's voice actor, Jen Taylor, and re-releases of Super Mario Bros. 2 have omitted any discussion of her gender.
References to her gender-identity can be found in some spin-off titles, however. Her character trophy in Super Smash Brothers: Brawl describes her as “a pink creature of indeterminate gender that some say would rather be called Birdetta”. While this may not blatantly state that she is transgendered, it is at least some form of acknowledgment. Her gender was once again brought up in the Japan-only Wii title, Captain Rainbow, where Birdo, being played by a male voice actor, had been imprisoned for trying to use the female restroom. In order to set her free, the player heads to her bedroom to find evidence that she is female. What they find is a censored, vibrating object (you can see why this game never made it stateside). While this may be a crude way of addressing this issue, it does show that Nintendo has not completely retconned her gender-identity.
Birdo continues to be an enigma in the Mario universe. While she may have been created as a simple mini-boss, one peculiar line in the original manual has turned her into a memorable addition to the franchise. It seems that Nintendo is unsure of how to treat this issue, but there may come a time where they openly embrace this character's unique origins. Calling Birdo “revolutionary” feels like a stretch, though there is a definite charm in having a possibly transgendered character featured as playable in popular franchises like Mario Kart and Mario & Sonic at the Olympics.