I think it's been explained already that there's a difference between the conventional form of video game violence and the problem of rampant objectification in the gaming industry.
Not all forms of violence are tolerated- look at the backlash Hatred got, for example. You also won't find a plane hijacking videogame or a live bomb simulator (Counter-Strike is an exception as it takes place in areas devoid of life and therefore avoids the pitfall of playing as a person that kills innocent people). The games based on violence usually don't humanize the mobs you kill. Some do this by making zombies or aliens the enemy, most do it by setting in an environment of war where people feel there's no moral quandary in killing hundreds since the other party's out to kill you too, and others disassociate themselves from the gravity of murder by satire or being over the top (GTA or Hotline Miami). So the sort of violence in games (and other mediums!) has been somewhat "neutered" as the industry developed. It's developed an implication that the things you're killing aren't people with feelings and personalities and loved ones waiting off screen and so it's okay. There's also the reason that the American (and overall Western) culture grew to be one to glorify conquest and violence. I know some people critique the prevalence of violence in video games, but many of us have played (and really enjoyed!) a game where the purpose is to KILL- be it robots, aliens, Russians, zombies, or faceless soldiers.
Humans do enjoy killing things in video games- that's just something we live with. So it's normalized. But, as we have obviously seen, this wide enjoyment does not at all translate to real life. People don't condone terrorism or murder because they enjoy going on a murderous rampage in a video game. People have demonstrated that they can separate a game's implications and their real-life conduct, so (rightly) it is allowed.
With objectification though, there's a different ballpark- the OVERWHELMING objectification of female characters in the gaming industry feeds back into how some of its constituents behave. The major concern of people standing up against the objectification of women in video games is that it perpetuates the oppression of women in the real world. The objectified woman characters do not imply that "this character is designed in this pandering way because of the sexuality of the developer"- it implies, instead, that its sexualized depiction of women corresponds to reality.
Objectification of women has failed to create the implication that it simply celebrates the (heterosexual male) sexuality of the developer. That's the major problem here.
Objectification also often makes no sense within the game's context- a bikini should not be able to serve as any sufficient defense against a sword slash but many RPGs have the option. Or a character does nothing but act in a way obviously (and deliberately) designed to titillate the audience. So it hurts the game's story from a critical perspective the way you wouldn't have a character just ranting about -say- snacks all day, or repeating a few clichéd stock phrases. So objectification also hurts video games as a storytelling medium.
The sexist perspectives portrayed in video games DO translate to real-life consequences, in sexual harassment (or worse) and a general disregard for women in the industry as a whole. A great lack of female protagonists and perspectives also causes much of the industry's output (especially AAA) to devolve into dudebro shooters and similar cliche scenarios.
That said, I think that it's still perfectly alright for a game to use objectification and sexualization by itself so long as it doesn't contradict the game's views and messages. Directors and creators have the right to create characters as they wish, which includes creating characters pandering to their sexuality. For example, I have no problem with 2B from NieR Automata especially being designed in a sexualized way because the director Yoko Taro wished it so- it doesn't contradict any theme (as far as I've played of the game), and it's just Taro sharing and embracing his sexuality. I believe it's more important to acknowledge such design as a facet of the creator's sexuality, rather than trying to shoehorn in a reason as to why a female character is designed in a way to appeal to a male audience (a la Quiet). The director's sexuality doesn't lose its merit or importance (or the director's right to share it and shape his work based on it) just because the rest of a game is about some other theme. It might not appeal to the whole audience, but that does not mean it is problematic for the creator to include it. (I used objectification and sexualization interchangeably because some believe that any sexualization immediately means that the creator's misrepresenting women and being sexist.)
I think the solution comes from promoting non-sexualized portrayals of women so that they greatly overtake objectified representation, so that the general impression of women represented in video games is more realistic than today's sexualized rendition.
I think it'd be easier to come to a conclusion if people were talking about characters designed SOLELY to titillate, but I've seen that many people have now also begun to argue that it's problematic to sexualize the DESIGN of a non-sexualized character (see the example of 2B above- people argued that 2B wearing a leotard under a skirt was sexist even though the character herself is characterized extremely well.)