Well, I would have just made the world one where females could reproduce with each other. Thats it. If the dev is ok with magic penis' being in the game, it shouldnt be a problem to establish early on that females can get other females pregnant.
It feels like the dev wants to have a grounded game in reality...except for the magic penis which doenst really make sense. If magic is real in world he/she could literally do anything, and they chose futa as the option.
They could say hey, your coochie is magic for the next 2 nights and if you rub them together and have a big climax bam, a baby could be born.
You propose a world where men are not needed and this world does contain men. So no reason for such a trait to evolve.

Not saying that you cannot have a fictional world where females can reproduce together, however their anatomy would have to be different from our women.

There's magic and then there's magic. Hard magic system vs soft magic system. In the first one magic has to obey rules and can do only certain things you establish that it can. You have to remain consistent for it to work, but you get a more satisfying result. You can even use it as a storytelling device to move the plot forward. In a soft magic system, magic can do whatever you want it to do. It is often used as a crutch, kind of a deus ex machina. See Disney's star wars fanfiction. Though I wouldn't call it even that, as they are clearly not fans.

I think you see the difference. Bwg has invented a whole history for his fictional world, we can assume that he has thought about the role and rules of magic in his world. And he has so far shown restraint in applying magic in his games. Thus we can assume he is leaning towards a hard magic system.
So no magic being used willy-nilly.

However I did mention using a magic ritual to impregnate Amelia. Integrate it in the story and I would be perfectly fine with it. For example Michelle meets Tara in disguise and she points her to a tome of ancient wisdom. Or just appears in her dream and explains to her how to cast the spell. You get the picture.
You know, I would find it funny, if in the future we get a scene of Michelle and Amelia sitting in a circle and summoning ancient gods. Bastet, Hathor, Aphrodite, or any old fertility deity. Michelle even could act as a medium and invoke the deity in question. And then fuck the shit out of Amelia. Hell, call upon the Elder gods and grow tentacles and several long cocks, lift Amelia in the air and fill all her orifices.

Anyway. We don't know the nature of Asa's appendage. Though I have a feeling that it's her pet project and not research officially conducted at the hospital. She could also have crossed paths with Tara, who bestowed upon her this gift. We don't know.
