Afraid it might hurt their “good” name, or maybe it's just to much a niche to burn their million dollar budgets on. For most Indiegame developers this is a good thing. It leaves the erotic market for themselves and they don't have to compete with those enormous PR hype machines, so typical for the current game industry.

The drawback however is that without a few big industry names claiming the genre, most people don't even know there IS such a thing as sexual computer games. After an attempt to “normalize” the genre in 2006, mainly by Brenda Brathwaite from IDGA, the publisher of the book “ Sex in Video Games”. It has been very quiet and sex games are still in some sort of limbo between games & porn.

The good news is that there are still game studio's making erotic games AND that there's an audience buying & enjoying them. A small roundup on the genre.

CherryDolls | Rated ++/+++
A new title CherryDolls, by Ripened Peach Entertainment, released this year. The game has an overall “Virtual hottie feeling” but the female models are more cartoonish, which is a nice change from the general tendency towards realism. For the rest the game is exactly what you would expect, choose a female char & male and let them have sex in the scenery of your choice. Nothing innovative but nothing bad neither. If you prefer more realism you could also check out Virtual Hottie 2.
CherryDolls website
Virtual Hottie 2

Digamour Adult RPG | Rated +/+++
On top of my wish list (when it comes to adult games that is) would be a sexual themed RPG or even better an MMO where sex is an integral part of the game play. I highly doubt if we will ever get to enjoy one. By it's nature an RPG or MMO needs a large company to create the content and keep those servers up and running. When I first encountered the Digamour title I was jumping up and down, right & left of cheer excitement, finally the game I was waiting for? Or not?

Unfortunately the game Digamour is not what I expected it to be, despite the games slogan “The worlds most realistic realtime Adult RPG video game”. It's not realistic ( besides it's rendered screenies ) and it's not an RPG where you improve your character and explore a world with your in-game avatar. The game is just a very average sex game with a few RPG elements thrown in the mix to make it stand out from a mostly marketing perspective.

Before you spend you money on this game download and try the demo. If you are looking for a social MMO kind of experience, maybe Red light Center is something you should check out. The graphics are similar, but Red Light Center has the social factor going for it.
Digamour website
RedlightCenter

Thrixxx ( sex villa, Virtual jenna, Gay villa ) | Rated +++/+++
An old name in the genre is 3D Sex Villa, developed by Thrixxx technologies. The game is branded under many names like 3d Sexgames, Virtual Jenna or 3D sluts. Different names for basically the same computer game. The game still looks nice after all these years and offers the most “fluff for the buck”. The cheer amount of costumes, sceneries and toys makes it a fun game. The great drawback for me personally are the stiff and machine like animations. But if you don't have this game already I would definitely give it a try. They also have a gay version of the game, the only gay sex game in existence.
Visit main website
Gay version
( pages are loading quite slow, be patient )

The Velvet Express | Rated +++/+++
The last game I want to mention that's released in 2008 is the Velvet Express. The Velvet Express is an interactive erotic game situated in the 30's of the past century. The game is build on a new engine that makes it possible to combine realtime physics and animations. The player can control these physics by using the keyboard. This gives a very realistic “fleshy” feeling to the sex in this title. The game has a wicked atmosphere ( the machine room is almost surreal ) and it features an abundant amount of positions to choose from.
The Velvet Express website