So now that I've done a bit of research, I feel like I need to collect myself and figure out whats important so far:
1. So far, theories seem to suggest that all characters, regaurdless of their gender, are designed with the cys white male gamer in mind : most are, indeed white, male and straight.
2. The avatar acts as an extended version of the mirror stage in childhood development, where the player becomes fascinated with how his or her own commands are visually shown as reality on the screen.
3. Those avatars that are not masculine and are 'marginalized', tend to be directed towards younger male gamers who may not have come into their own form of masculine power and can associate with a character who is going through similar circumstance.
4. Female characters in video games are voyeuristicaly sexualized when a non playable character, but de-sexed when playable: they are either asexual, in some way hinted at being lesbian, or have their sexuality taken away from them by some outside force, similar to The Final Girl in horror film tropes. Oddly, while female characters have their sexuality removed, many male characters often find themselves with a love interest as a "prize" to be gained (ex: Mario and Peach, Link and Zelda)
5. Male characters are shown to be an extreme form of masculinity, able to present an avatar of a superhuman self. This masculinity tends to be looked at as a form of spectacle in which identification is used as a method of appreciating the masculine form, as there is, in our society, a homophobic tendency to refute the knowledge of the male form as an erotic object. In this case, the easiest way to gaze approvingly at a male character is through the use of a Sado-masochistic gaze where, in short, an underdog story can emerge. S+M gaze works to an advantage in games as it creates narrative.
6. There is a limited awareness of the average male in video games, which could be a true reflection of the gamer, and therefore show a sign of weakness and the ability to judge character by a female viewer (as based on the melodramatic penis theory)
7. There exists a fluidity of objectification and identification between gendered characters- both men and women identify with characters of either sex to varying degrees.
8. The avatar exists as a symbolic other to be controlled by the player and establish a dialogue between looker and doer in order to live out fantasies that could otherwise be unachievable.
There's still a lot left to look at, in particular:
1. Do female characters have any inherent power as male characters do when being controlled by the player? or is the power still strictly apparent?
2. How much of video game gender poletics rely on common, often patriarchal societal influences
3. Why do men not want to play as female characters, particularly when they get hurt? can the sadomasochistic gaze still work to create a hero story? Is the hero story an essentially masculine one?
4. Can a male presence still identify with a straight female or a gay character? Do straight women truly identify with a straight male character?
5. How much of gender is fluid when it comes to the avatar? How much is actually polarized? What is wrongfully apparent because of how why and who games are designed for?
6. Games and lesbianism as spectacle for male pleasure
7. How applicable is the trope of "The final girl" to videogames (with examples)
8. How do people relate to non-gendered avatars, such as anthropomorphic pinatas and goats?
I'm sure theres more, but seriously, if anyone thinks of anything I am overlooking, feel free to leave a comment about it. The more holes I find now, the more thorough a discussion I can have.