Why games with sexual content are those boring renpy VN with uncanny valley models; while these good looking and interactive games have no lewd stuff?
If you are on Steam you want to establish yourselves as a Team and as such you play by the rules and one is hitting a big as possible audience lewd content can be also a problem to manage within your targets.
The way doing it over a DLC is also not entirely Secure and many think loosing Steam is to valuable to risk.
Their results have a certain grade of quality that could become very problematic see Holodexxx case.
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Though having only a Semi Photorealistic Target is currently avoiding the extreme hard case for most, especially in the APAC Region its practical 0 problem at all lets some cute 3D characters fuck like there is no tomorrow as long as they are censored and try to hold up certain anatomical rules.
But on a Country to Country base this could crazily reverse as well depending on your character Design and target and most APAC lewd content is actually forbidden in most western countries by default because of it's mostly to aggressive "sexualized" Design targets which also is a very very high efficient illusion to circumvent the uncanny valley to some degree.
But this run for the Cute has more amplifications that changing a lot in ways we do not really understand fully yet, we slowly see some things happening in the next generations but its still not easy to understand the full relations and how it really subverts our perception of things.
Though the run for the most artificial look becomes very visible (growing manipulation everywhere).
And nobody sees it better as we Character Designers as we Study Humans in and out as unmanipulated as possible and we are part of this problem as well with our abstractions.