I read for the first time about “Ultimate Gay Fighter” at this excellent article in Motherboard. What the developer calls “the first gay video game ever” is basically a Mortal Kombat rip-off featuring too stereotypical gay characters who have generated very bad criticism from the LGBT community as well as their opposing side.
Unfortunately, we don’t find many companies trying to introduce gay characters into their games but Bioware is one of the remarkable exceptions. Their blockbuster title Dragon Age is one of the only serious, well-written same-sex love stories in videogames:
I completely agree with the Motherboard article that, even if the approach taken by the creator of Ultimate Gay Fighter has not been the correct one, we need more people like him making their own games.
Happily there are more different developers working on fresh projects around the world. One example is “The Machine to be Another”, which explores gender swap making use of the Occulus Rift:
You should check more of the experiments made by BeAnotherLab, based in Barcelona.
Another game creator representing the LGBT community is Anna Anthropy, who wrote a book encouraging everyone to start creating games. I highly recommend: “The rise of the zinisters“.