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Objectification is a tricky issue. Objectification is the process of turning a person into an item, sometimes for sexual reasons. Although this is kind of awkward, because characters in videogames are not people, and thus cannot be objectified in the same qualitative notion that is suggested by the term. Under the definition of objectification, all main characters are objectified as being acted upon by the player with a controller.
Another issue comes from sexual objectification in specific. So long as one does not believe there is anything wrong with the portrayal of the human body (which is why these games are rated M, so kids do not play) why would anyone have an issue with scantily clad characters? Since we are talking about videogames in particular, these characters exist in a fantasy realm that is not meant to simulate reality, and is actually meant as an escape from reality. So in a fantasy realm of people with superpowers, heightened abilities, or huge technological advancements, one would not expect such characters to conform to the notion of reality, especially when it comes to their portrayal as human beings.
And to top it all off, objectification is not necessarily an issue of gender, many male characters have been seen as stark naked (Raiden from Metal Gear Solid 2, Dante from the new DMC), overtly muscular (Flay from Mana Khemia and Barret from Final Fantasy 7), have ab windows (Gunvolt, Tales of the Abyss, ), or have overtly tight clothing (Duke Nukem and Hwograng from Tekkan). How one may say that these artists did not do this explicitly as objectification, but even so, it is the same result, despite the reasoning behind it. Which means that although many female characters are “objectified” under the loose definition placed with the word, many male characters are too under the same definition.
But does it matter? In my opinion, no. Because just as games are not known to cause violence, there is no evidence that videogames cause sexism, or issues in self esteem. Videogame characters live in a fantasy world that does not, and should not, simulate our own reality. Besides, there is nothing wrong with the human body, and if the game creator wants to make a game with stark naked characters, that's their call as game creators, and if not, than so be it. It's not up to us as consumers of the media to force game creators to conform to our liking, it is our duty as individuals to decide whether or not we like a game, and rate it like that, or refuse to purchase it altogether.
The human body is not a bad thing, so let's not treat it as such, even if it has enhanced features. Remember, this medium is supposed to allow us to escape reality and live in a fantasy world, not the other way around.