Tranny representation was already all over gaming.
RuneScape with Angof from "The Light Within" says she was born male but through shapeshifting "corrected" herself to female. World of Warcraft has a dragon called Chromie who transitioned into a woman after a draconic ceremony called Visage Day and was clarified by narrative lead Steve Danuser to be transgender. Pelagos from Shadowlands, the 8th expansion pack for World of Warcraft, was a woman who transitioned into a man in the afterlife. In Mighty Jill Off, Jill and The Queen are in a relationship and Anna Anthropy, the game's designer, confirmed that The Queen is trans. Assassin's Creed Syndicate has a character, Ned Wynert, who is a trans man. Mindy Blanchard is a transgender character from Dishonored 2, who has trans interactions in the game, and who the game's director, Harvey Smith, confirmed was trans. Poison from Final Fight was confirmed to be transgender in a 2008 interview with Electronic Gaming Monthly. Alesha from Magic: The Gathering Arena is a trans woman featured in a card for Magic's 2022 Pride celebrations. Klement from that game and Baldur's Gate was confirmed by narrative lead Justice Geddes to be a gay trans man. Yuma from Magic: The Gathering Arena is a trans man who became a gangster to raise money to medically transition, and is further confirmed trans by the cover story and by the game's lead designer, Mark Rosewater. Mass Effect has Hainly Abrams who informs the player she's transgender, tells the player her masculine birth name, and says she left the Milky Way Galaxy searching for greater acceptance of her gender identity. Persona 3 has characters who flirt with a woman before realizing she's transgender (this may not count, since they took it out of the remake). In Watch Dogs 2, the city councilwoman Miranda Comay is explicitly trans and claims the religious group Church of the New Dawn hacked her medical records and released footage of her genital reassignment surgery to the public. Watch Dogs Legion assigns characters as trans and includes metadata for them like "prescribed estrogen." The protagonist of Celeste, Madeline, was confirmed trans in the Farewell DLC where her trans pills and trans flag can be seen in the game's final moments. The developer of Celeste is also trans. Guilty Gear has Bridget who is famously trans.
I could make that 3 times as long. There are a lot of trannies in games.
Vivian's notable specifically as a tranny in a big Nintendo game, specifically because that's out of character for Nintendo, a company known to resist tranny agendas. Until days ago she was was a girl to the English world in the GameCube version.
Birdo was never a tranny. SMB2's manual writer made up as a gag that she crossdressed, Nintendo higher-ups disapproved and made her a girl in every game since. She exemplifies an earlier Nintendo that resisted questionable lore by rogue employees.