This may be a going off on a tangent.. but since the examples known to me (Vaan being one) of 'gay' male video game characters aren't explicitly homosexual, has there actually been a male video game character that was openly gay?

To answer the original question though, different cultures are perceived to expect different things from their male leads in video games. Big, built, macho men are the norm in Western developed games, particularly in a game like God of War where it's played out like an action movie. Maybe up at Squenix HQ, they thought players would be able to better fill the shoes of someone scrawnier and not particularly strong looking (because immersion in an RPG is arguably more important than in an action game). Characters like Vaan, Tidus, Zidane, Squall etc. all rise from fairly obscure beginnings to save the world and the players are supposed to feel like they are the protagonist and Squenix may not reckon that a Kratos-esque character design would achieve that feeling.