CheatCC: Ever since their creation, most of Nintendo's characters have existed in a non-sexual universe where babies obviously exist (e.g. baby Yoshi), but they seem to just appear without any nudity on their parents' part.
And this is how it should be.
In fact, the next person who tries to convince me that Princess Peach looks hot in her Mario Tennis outfit is going to get reported to the authorities. Princess Peach is adorable in the same way that pandas are adorable, not in the same way that Megan Fox is adorable.
But with Nintendo trying to reel hardcore gamers back into the fold using the Wii U, it's starting to look like they might begin to rethink their marketing and game design with the same kind of adult focus. And, even though most Nintendo characters live in a sex-free universe, there are several that could easily increase Nintendo's sex appeal.