In the last generation or so of consoles character design has become increasingly important in games, not just in the sense that characters need to be well-designed to be appeal to players but also in the sense that player choice in the matter has become increasingly important. The steady improvement in the capabilities of gaming hardware and the increasing potential profitability and cost of modern games has meant an increasing desire by developers to create games you really want to play and enjoy, and a big part of having a game you want to play is having a character you want to play as.
Why do either appeal to us though?
For the most part, static characters (the term I'll used to refer to characters who can't be altered by the player either in sound, appearance or action) appeal to us because they offer a fantasised image of the sort of person we want to play as, so typically they're heroic, attractive and well-built men or pro-active, attractive and sexualised women. It's debatable whether we truly want either, but those are the kinds of static characters that dominate.
In terms of flexible characters (the term I'll used to refer to characters who can be altered) it's about the ability of us to create a character who we feel comfortable with and even attached to. Customisability only works if you have a certain degree of choice though – being able to choose from three faces and two hairstyles makes creating a character more interesting but it doesn't really allow you to make a unique character that you feel is yours, which is what a lot of players want. Players tend to feel that the more choice there is the more unique and attached to them their character is - hence why so many online games offer customisable characters and then charge for extras to help make your character more 'unique', because they know some people want that level of individuality in their character.
But why choose either of these? Afterall what's the point in having character choice? Why do we want to character design over say background element design or scenery design in a game...? For example, why can I choose what the Dragonborn looks like in Skyrim or Commander Shepard in Mass Effect, but not 'Random Villager 1' or 'Random Space Tourist 1'? Why can I choose what my character looks like in ME but not what colour my ship is, or what design it is?
It's important to point out that it'd be wrong to argue we wouldn't don't want to affect these things in games if we could, because we would, if the amount of bile the internet spews up after each new game is released shows us anything then its that there are definitely people who would love to control every little aspect of a game - tweak bits, change others, or generally shape the game in the way they want to. No, it's not so much that we don't want that but that compared to other aspects we'd like choice over or for the game's developers to get just right, it's less important, choice can always be sacrificed for the sake of a better game. We'd rather have a solid game with static characters and a set backdrop than one where you can change background elements but nothing makes sense.
I dare say a AAA title where you had the chance to play it through and switch styles as you did so (Sci-fi to Western, to Post-Apocalyptic, to Fantasy, for example) would be massively popular and a cult classic (if they could get it to work,) mainly because people would love the ability to choose the sort of game they were playing as they played and to switch at will.
The problem is however, in order to create such a game, if we're talking a AAA title that is, it would require a lot more effort than most games do at the moment, and given the high investment cost of making videogames in general (AAA ones anyway) it's just not feasible at this point in time. Not to mention the complexities of realising the concept, getting the script to flow, and creating an engine that could handle background and setting changes on the fly with ease.
So in theory we could have a game where we control everything, but for the most part that isn't what interests people, what we want most is a story, a good story - with good characters, that entertains us. Control over the world, the elements within it, and our own character, is secondary to that enjoyment, and for that reason developers haven't really pushed it as important, because they know in a stand-off between having lots of choice in a game but poor gameplay or having a static storyline with static characters that's done really well, people will choose the later.
It's the same reason why, when we do get the chance to choose, it's focused more on foreground elements – like your character, your actions, your team members, than on background elements – like, say, for instance what random townsfolk look like or what colour horse is most common in the in-game world (one random background element there). The background elements in a game are important to us, and indeed affect how we feel about the game, but we'd much rather have interesting foreground elements or choice over those foreground elements than choice over the background.
Imagine if you started a game, but instead of getting to design the character you have to play as you did get to design 'Random Villager 1' or some other ancillary character you'll see only once or twice. You'd feel cheated, you'd think it was stupid and probably think it made no sense, primarily because it's not something that would affect us much in the game and it's the elements of a game that we experience the most that interest us and that we want some degree of control over, not the random background elements.
It's probably stating the obvious to say this but when we play games it's really all about us: we're what matters to us. We want control over the elements closest to us in game just as in real-life we want control over the things most important to us, because those things affect us the most – afterall you're going to be playing your character the whole game, so if you think he/she's ugly then it's going to annoy you a lot more than say a character you run into once in the game being ugly, because of how much time you'll spend relatively with each.
So to summarise so far: For the most part we get the sorts of choice we get in games at the moment because people do want choice, but games developers can't give complete choice yet, so instead they attempt to offer a compromise and let the player customise certain aspects of their character and keep others static, because of the increased workload choice gives us. Not all developers do though, a lot of games, possibly still the majority of games, followed a fixed story, with static characters, foreground and background elements, either because it's simpler or because they know they can do that better.
Which leads us to the question of why?
Why choose a static, fixed, character over one the player can alter? What are the benefits and drawbacks?
For the most part having static characters is simply an expression of the effort it takes to make games, it takes effort to make a character but it takes more to give player's choice, so having a fixed character is simpler. It also means a character can have a specific, fixed personality, which helps when you're trying to write a good narrative – if you know how a character is motivated, how they'll act then you can know how the people around them will react, potentially giving your game more realistic characterisation and dialogue and improving the chances people will enjoy it.
Also, generally speaking there are conventions about what makes a good hero, developers know that players generally want to play attractive, athletic, sexually-stereotypical characters, so they stick to these sorts of character outlines and make someone that (potentially) most people will enjoy playing as, although like with choice this has it's own set of problems.
Typically with your standard hero if your character seems too bland you're not going to enjoy playing as him/her as much. When developers create a character it's always a balancing act between making them generally interesting enough that they'll appeal to as many people as possible but also making them unique enough that they seem real and don't seem bland and too stereotypical. Making a static character is not as time-consuming as giving the player choice about their character's identity but it does throw up it's own set of problems related to how players feel about the character they're playing as.
Character design is it's own double-edged sword in many respects, because just as you create a character which interests some people you'll disinterest others, and vice versa, though obviously it's not an even split; you also have to contend with player apathy – it might not be that players hate a character or love a character but that they have no emotional reaction at all to a character and just find them forgettable, which in it's own way can be worse than a character provoking a negative reaction, because atleast if a character is hated it's a reaction and it's something that makes them memorable.
Isaac Clarke for example from the Dead Space series is a good example of this at work, in the first game his lack of voice and character allows him to be a vessel for the player to put a bit of themselves, that character void is something we subconsciously fill almost automatically. Therefore we're more indifferent to Isaac in Dead Space because he has no real character. Fast forward to Dead Space 2 and we can have more of a reaction to Isaac, because he now has his own personality and we can therefore get a firmer grasp on the type of person he is, we can love/hate his accent, think he talks too much or not enough, etc. Giving him a voice also creates the opportunity for us not to like that voice.
Looking at series like Uncharted, Duke Nukem, Gears of War, all these franchises have characters we're familiar with, and can have a particular reaction to. This helps attract us to a game if they're the sort of character we like, but can also put us off a game if they're not, but it's about identity, the clearer a reaction we have to a game – love or hate, the easier it is for us to decide whether or not we want to play that game, and thus put money down on it (which at the end of the day is what its all about) and having static characters helps in that regard.
Mass Effect is also worth mentioning in passing here, though it is mostly a game about choice it does attempt to bridge the two worlds of static and flexible characters by giving players the choice of customising or just going with the standard male or female Shepard. So in a sense you can choose to be unique or go with a pre-packaged model. It's not exactly the same thing, because Shepard is still a pretty flexible character but it's a compromise between the two.
So why choose flexible characters? Why allow the player to make their own character?
The clearest benefit is that as the player gets to choose who their character is they're more likely to enjoy playing as them, they're also more likely to actually remember the character after they finish the game rather them just being a blur. Also, getting to create your own character can be a satisfying experience, from just getting to design their face, to the type of character creation you get in games like Skyrim where you choose their appearance then get to train them up in the sort of skills you want.
If playing games was simply about being, say, a knight or an archer then we'd probably wouldn't have the level of choice we do in games, this ability to mix and merge skill sets and be two or three things at once. Part of what we enjoy in games is having rigid, fixed, structure to a game, but also part of what we enjoy is the freedom to make decisions, and the more choice we have over our character and the way we play the happier we are generally.
Choice allows us to create who we want but it comes with its own set of problems. Most obvious of which is that typically games where you do get to affect the type of character you play typically involve the player having a more distant relationship with their character – in Skyrim for example, your character never speaks, never properly interacts with other characters like a person does, so there's no rapport. You're simply told things and they reply to you as if you've spoken, which can lead to a disconnect, even if you feel a sense of connection with your character's appearance.
Ofcourse it's also true that not everybody cares about feeling connected to their character, for some just having a character look the way they want is enough, but for true connection with the character it means something is lacking – in much the same way that many characters from 90's videogames lacked a sense of character, despite having a fixed appearance and identity, because they never talked so they never felt properly human to the player.
Player freedom is always an issue in character design choice and often games can offer a 'restricted' type of freedom in order to maximise the benefits and downsides of static vs flexible characters. Simply put, in restricted freedom games the more choice a player is given the more is taken away in other respects, with choice streamlined in favour of a more 'semi-choice' option. Open choice often means losing out in terms of realism or characters not interacting as fully because of the effort it requires on the part of the developers, so instead some developers pick and choose which elements are static and which customisable. A good example of this sort of compromise is again Mass Effect, where you can change your character's appearance to a large extent and aswell as make choices about your actions and dialogue, but once you've decided their gender their voice is static and the plot largely predefined (aside from a selection of plot points - choices which, even so, don't alter the missions you're given or the order you do them in.)
In this sense Mass Effect gives you some choice - over what order certain missions are done, over your character's appearance and behaviour (and thus NPCs reactions to them) but at the same time keeps things fairly structured – despite being able to play the game numerous times and with differing outcomes (and effects in ME2) the events that happen, when they happen and how they play out (regardless of dialogue choices) remain fairly static.
The benefit of this is that you get a character who in most regards is fairly structured, like a regular, static character; which means you can have NPCs who react in a particular way to him/her and he can react back, adding to the drama, which really isn't as possible with a silent character. It's more work (more dialogue choices inevitably mean more dialogue and so more voice-acting) but the plus side is this sort of structured character can have more dramatic impact, they're less like simply a slot to put things in and more like an individual, and thus somebody you'll likely remember after you finish playing.
This generation of games especially seems to have more than it's fair share of generally attractive male action heroes and sultry temptresses, who just about seem to hit all the right keys – Resistance 3, Dead Space 2, Assassin's Creed, inFAMOUS, are all good examples of games where the games have characters that all seem pretty middle of the road, sure they're unique in their own way but they're generally attractive and bland enough that everybody can like them. They're attractive on a general level, they're too broad to be really appealing characters.
On the other side of the coin though there's games which stress character creation – like Fallout 3 and Skyrim, characters in these games tend to lack something in terms of charisma, afterall neither games involve talking characters, or particularly emotive characters, so you tend to be stuck with characters that look the way you want, can interact they way you want with the world but don't really seem to engage with it properly – atleast not like real human beings do.
Whether or not a static character or one who one you choose yourself is better is a difficult question to answer, primarily because at the end of the day it's an issue of personal preference. I've written before about character identity, including on the silent protagonist as a character, and as with that, for some people having a silent protagonist in games like Half-Life and Fear makes people feel even more invested in the character because they don't feel as though they're having a character they find annoying forced on them. They can fill the void with their own sense of character. For others though, me among them, this lack of characterisation, this void, signals more about a lack of identity in the hero, and thus a problem rather than a plus.
In the same sense character choice provides us with a chance to fill that void with a sense of ourselves but it still leaves something to be desired with it comes to a truly inspirational character, flexible characters often don't have the strength of character that a static character does, though vice versa, fixed characters can often seem bland, too broad to really have character if they're not done well. For some the first is preferable, for others the second.