Did I miss something at the end? I closed that window once everyone stopped talking.
This was quite the long episode, but completely worth it because the discussion topic was a serious one. I don't see the real appeal of the Wii voting thing, but since we have one here I'll put my vote in for cake (that'd be my prediction as well). Thanks for mentioning that Miyamoto interview; it is of interest to me but I wouldn't have run across it on my own. Also, though your segues were decent, it's somewhat counterproductive to mention them every single time (as amusing as it may be at times).
Basically, the previous paragraph was everything I had to say not about the subject of violence in video games. Since you said you wanted to know what we think on the subject I'll offer my thoughts... which is likely to be a fair amount of text.
Let me be up front in stating that I'm a pacifist, which makes my perspective on this somewhat different. However, I play a considerable number of violent video games (in addition to being a fight choreography enthusiast) and I do not believe they are wrong for those that are old, mature, and mentally stable enough. Essentially, this is because I believe that violence itself is not wrong, but rather becomes wrong when it is used to end the life of another. If there was actually a choice between killing another or being killed myself (though such stark choices prove rather rare) I would choose to die, but I would most definitely not do the same if I was attacked by a wild animal. Violence in video games harms no one, and hence isn't wrong unless it has other consequences.
Not that I mean to endorse violent games wholesale. Frankly, I am bothered by some of the people with whom I play Halo - they are far too involved and their lives reflect violent spirits. There are a lot of young adults that I feel shouldn't be playing such games, simply because it does effect their behavior. An extremely small fraction will actually shoot anyone, but a much greater percentage will be rougher with people in real life.
I'd also say that age is a huge factor. Though I think children probably shouldn't do anything involved with a television anyway, the early years are very formative and they may not be able to properly process such influences. A personal example may make things clearer: some four years ago I played a bit of Devil May Cry at a friend's house. The amount of blood bothered me slightly, but I was very uncomfortable with the scene where Dante levitates through a sword (really, why doesn't he take it out first?). Picking up the game again a few months ago, I played the entire thing undisturbed. I think the only thing that changed was my age and whatever experience came along with it.
However, I have to admit that when it comes to violence I'm fairly jaded. When giving an informal review of the Trinity Blood anime I forgot to mention that one character rips out another's heart and crushes it because it honestly didn't register strongly with me. So perhaps they are right about games desensitizing people, but at the same time I don't think this desensitization makes me a worse person (and it certainly doesn't make me a more violent one).
I'd be interested in hearing some elaboration on God of War. Certainly, most of your time is spent fighting mythical creatures, but Kratos is still fairly evil in the sense of being self-serving. What immediately comes to mind is the part where you have to sacrifice a captive soldier in order to move on (and ignore his desperate pleas, for that matter). While I did it callously, I'd say that's somewhat morally bothersome. The skeleton of the guy that refused to do it is my hero from that game, anyway.
One part of the discussion I found interesting was on how different game styles dehumanize to different extents. A bomb is probably more impersonal than a gun, yes, but let's look at the issue in a broader sense. Does the Dynasty Warriors series dehumanize because you slaughter soldiers like cattle? This thought tends to surface in my mind while I'm playing, and I think it would be hilarious (or not at all, depending on how you look at it) to edit a mission clear screen to say "Congratulations! You've created 3098 widows and orphans in order to win a fairly insignificant skirmish!"
Video games wouldn't be alone in that, though. What about Risk? Can people get more dehumanized than little plastic cannons? Or Battleship? "I sunk your battleship and killed 20,000+ men! Yay!" For that matter, what about chess? If we remember that the pieces represent human forces, the game is disturbingly callous and calculating.
The Grand Theft Auto series is one with which I have difficulties (though I may be not be a fair judge because I don't enjoy playing it on a mechanics level). There's something slightly off about a game that invites people to revel in chaos so explicitly. Sure, you could just play through the missions (though those are all essentially glorifying an unlawful lifestyle), but can you honestly say that's why most people play the game? I'd say that 60% of the people I know who play GTA or a GTA clone have never even touched a mission and just run around killing and stealing senselessly.
A few people made a distinction I think is valid, that being if the game simply allows an evil path or is actively built around an immoral premise. How would you define the difference between that, however, and choosing to make all the evil choices in some other game? For example, I played through Fable twice - once pure evil and once pure good.
Actually, I could tangent on Fable for a long while, though I will not. As vaunted as its morality system is, I think that if taken seriously (and it's just a game so it doesn't have to be) it cheapens real morality. Everything boils down to points? That doesn't leave room for any difficult morality and leads to odd situations like people being fine with a murder committed due to good deeds. You can be Jack of Blades reincarnate wielding the Sword of Aeons drenched in your family's blood, but if you kill enough of them durn beetles folks will conclude you're alright. I also found it very telling that killing evil characters gives good points... I almost felt sorry for the two evil priests, because on my good game I slaughtered them every time I went past.
Ultimately, I feel that as a Christian I don't approve of any video game protagonist's actions. There are probably exceptions for games in which all the opponents are nonhumans of the pure evil sort (and we'll ignore simplistic games like Tetris or Mario, though turtle stomping is a serious matter). But I also don't see myself as the character in the slightest, even in first person games that invite such. But I think that if we require all the characters in our entertainment to live perfectly moral lives we are left with nothing, including the Bible.
That may have been slightly rambling, but I hope it edified someone or was at least interesting. Unfortunately, I don't have a concluding statement, so this is more a collection of thoughts than something with a point.