Aren't we forgetting the most common of all the common villain stereotypes? The rich white man. Not only does the rich white man show up as the villain in movies, he's also the most common villain tv shows, comics, video games, and Archie cartoon strips. More often than not, the extend of the rich white man's characterization is that he's rich and white.
And as much as everyone would like to blame racism or classism on these kinds of trends in entertainment, let us not turn a blind eye to the real villain: lazy writers. Muslims turn up as villains in a lot of today's video games because America is currently at war with two Muslim nations. Therefore, muslim characters don't need to be developed as characters because American children can already associate them (in their simple child way) with villainy. Not because they're Muslim, but because we're at war with them. They could easily be replaced with any other stock character we've been at war with at any time. Hell, half the time they could be replaced with a black sillouette character with the word "villain" written across his chest. Through lazy writing, various races and classes have replaced the old western "guy with a black hat" as the easily identifiable villain.
The same can also be said of WWII era germans, japanese, russians, and rich white men. The same can also be said of Mongols, the English, Americans (outside of America, most of the time), corporations, and so on down the line. Half these writers stop only a step or two short of having a narrator tell us "he's the villain because he's ."
It's not necessarily racism (though it definitely feeds racism at times). It's just lazy writers doing a crappy job, and nobody has the sense to call them out on it. If you really want to change this, tell everyone on forums like these to stop buying poorly written games.
Rent first, buy later.
