I always think its dumb to try to respond to this, because normally you are responding to people who have the typical, messed up Puritan view of sexuality. (Which is that sex is wrong, it's particularly wrong for women, and women who look like they actually enjoy their sexuality are evil and must be destroyed.) This is called the [a href="http://madonnawhore.com/"]Madonna/Whore complex[/a] usually, and its sometimes mistaken for feminism, when it's usually just good old fashioned father-knows-best paternalism. This offends me because I have a sexy wife who enjoys her sex appeal, and I'm in love with her and have been for 12 years. Please put the scarlet letters back in the 17th century along with the witch burnings!
In Japan, of course, they have a whole different set of sexual hangups that don't necessarily translate. However, this particular one doesn't really exist over there in this way.
So you end up with a culture clash, which expresses itself in typical Puritan hostility to sexy women. Especially sexy women with agency (there's normally much less objection to sexy women who are helpless victims, as in American games like Duke Nukem'). In other words, plenty of people don't like women like Taki, or Mai, or Cammy who can kick your ass and look good doing it, but they'd be ok if those women were tied up and hanging in the background like Mary Jane Watson-Parker in Spider-man for the Sega Genesis.
As Quentin Tarantino said, people were OK with Alabama until she decided to fight back against Virgil.
Now, when the first woman appeared in the most important, revolutionary fighting game in Japan, she didn't have that much sex appeal. I'm speaking of Chun-Li here of course. Chun-Li wasn't deformed, and she dressed in a feminine manner, but she wasn't designed with sex appeal in mind:
[a]http://strategywiki.org/wiki/Street_Fighter_II/Characters/Chun-Li[/a]
About the only thing I can say about her is that she's bare legged. Her legs seem muscular. Her breasts aren't particularly large. She's in a pretty dress, but not one that is "sexy." I mean, I think she's pretty, but she's not exactly Shampoo (who appeared in a 16-bit fighting game based on Ranma 1/2):
[a]http://animebaths.wikia.com/wiki/Shampoo_(Ranma_1/2)[/a]
Chun-Li was popular, and when SNK and a few other Japanese companies figured out there were riches to be had by making Street Fighter II over and over again, they introduced other female characters. For example Art of Fighting had King:
[a]http://strategywiki.org/wiki/Art_of_Fighting/Characters/King[/a]
Who basically wears drag and mostly looks like a Bishonen guy, and Yuri:
[a]http://strategywiki.org/wiki/Art_of_Fighting/Characters/Yuri[/a]
Yuri is likable enough, but hardly a sex goddess. On the other hand you had the Fatal Fury series. In the first Fatal Fury women were notable mainly by their absence.
Then came Fatal Fury II.
Kaboom!
The character of Mai Shiranui is introduced:
[a]http://strategywiki.org/wiki/Fatal_Fury/Characters/Mai[/a]
She's a bona fide sex symbol, guaranteed to put Puritans of both sexes up in arms... and a major hit. Capcom would respond with Cammy, another Femme Fatale type:
[a]http://strategywiki.org/wiki/Street_Fighter_II/Characters/Cammy[/a]
After this, you could divide fighting game females into two types. The non-sexy ones that everyone forgets about, like Pai in Virtua Fighter:
[a]http://www.mobygames.com/game/windows/virtua-fighter-remix/screenshots/gameShotId,12036/[/a]
(I think you're pretty, Pai!)
And the sexy femme fatales, like Lei Fang in the deliberately sex drenched, less "serious" competitor of Virtua Fighter, Dead or Alive:
[a]http://deadoralive.wikia.com/wiki/Lei_Fang/Outfit_Catalogues[/a]
Now I've heard that other countries besides Japan make fighting games, and I think I might actually have played one once. I think it was ugly, hard to control, and the characters were stupid. Actually, I think I played more than one non-Japanese fighter like that. Unfortunately... I don't have anything good or interesting to say about them! Gomen Nasai I guess!
With Japanese games, often sex appeal is one trick used to compete against rivals. For example, Soul Edge made itself very different from Tekken including increasing the sex appeal of its fighters (sorry [a href="http://static.gamesradar.com/images/mb/GamesRadar/us/Features/2009/07/Ugly%20polygon%20babes/Screens/P%20to%20Z/Sarah--article_image.jpg"]Sarah[/a], but you are just too tough looking!). On the other hand, the only sexy female in Samurai Spirits until [a href="http://snk.wikia.com/wiki/Mina_Majikina"]Mina Majikina[/a] (designed to be the opposite of innocent and childlike [a href="http://snk.wikia.com/wiki/Nakoruru"]Nakoruru[/a]) was introduced late in the series was Mai Shiranui in her cameo in [a href="http://www.giantbomb.com/mai-shiranui/94-182/all-images/52-300913/gen_an/51-1335187/"]Gen-An Shiranui's ending.[/a]