Despite Nintendo's strict policy against the depiction of sex or nudity in video games, a few things snuck past — some blatant, some not. For example, in the game Breath of Fire 2, there exists a big bad by the name of Deathevan. (Yes, I know. It sounds like the screen name that your high school friend Evan used during his goth phase.) Flying Omelette points out that the character sports a pan pipe of worm-like horrors emerging from his lower abdomen that evokes peens of an H.R. Giger aesthetic. Yikes. I dub thee "penis dentata," awful thing.
It's not all so grotesque, however. My beloved Kid Icarus boasts two instances of nudity, even in Nintendo's early days. First, the background of the game's final level features some Venus De Milo clones, as armless and full-busomed as the actual statue. More surprisingly, the game's manual depicts artwork for a minor harpy enemy — called "Syren" probably for the same reasons that the game's goddess damsel is called "Palutena" instead of "Parthena" — that has some very exposed breasts, nipples and all.
Another game that sucked away my valuable childhood hours, Secret of Mana, snuck in the nude female form through the presence of a minor enemy: a floating, spell-casting book saddled with the unusual name of "National Scar." The name makes a lot more sense knowing that the book occasionally flips to a two-pages spread featuring a said nudity. That's "National Scar" in the sense of the National Enquirer or some other such tabloid rag.
It's perhaps as much of a stretch as the Mario Kart penis rock, but the game Yoshi's Island has a stage with a background feature that looks suspiciously like a the torso of a bikini bottom-clad female torso. Funny, but pretty benign, and I'd imagine resulting from a programmer who didn't want his sense of mischief to get him fired. "What are you talking about? I don't see it. If you see it, then you're the pervert."
And, continuing the theme of risque elements in video games only as a result of her previous associations with less-than-normal sex, Flying Omelette's extensive Switched at Birth pages posit where Nintendo might have been inspired to create Birdo: the Snowths, the snout-mouthed whatchamacallit Muppets best known as the back-up singers in the "Mahna Mahna" sketch.
The newer Muppet Show redid the "Mahna Mahna" sketch, apparently, with Sandra Bullock. The below screenshot of said remake depicts the Snowths looking vaguely more Birdo-like. Who knew the Birdo-Snowth relationship was so profound?
This has been your foray into the sexual undercurrent of modern video games.
All images from the good people at FlyingOmelette.com, execpt for the one of dancing Sandra Bullock.