Transgenderism is when a person strongly identifies as a different gender from the one they were assigned as at birth, most often (but not always) male-to-female, or female-to-male. Among the many things video games have improved along their long lifespan are diversity of characters, which absolutely still needs a lot of work, but is improving each year to be so much more inclusive of all types of gamers people of colour, women, the whole spectrum of sexual orientation, and of course transgendered persons.
Video games are maturing and growing at a very rapid rate, moving past the days where walking from point A to point B without context was enough to suffice, into a very broad scope of visual design, gameplay concepts, and character exploration.