This is an interesting story: she was originally a woman, but videogame executives thought maybe Americans would consider hitting women rude, so they decided to make her a "newhalf," i.e., give her a penis, apparently under the rationale that the American market couldn't possibly find anything controversial about that. Look, it's Japan, it's another planet. They retconned a little afterwards; the official statement is that she is post-op in America, but in Japan she has her original genitals. She identifies as a straight woman.
She hasn't appeared in games lately, from what I can tell, but the reason I know about this is that she's been honored with a sexy collectible statue, and so Chris Sims mentioned her in his Worst and Strangest Collectible Statues of 2009 article for Comics Alliance. Her statue falls under both categories: worst because, in the grand tradition of oversexualized comic statues, she's wearing an outrageously skimpy halter top, boyshorts, and high heels, has her hips provocatively swayed, and is invitingly dangling a pair handcuffs from a finger. Strangest, because, as Sims points out, the sort of people who purchase these kinds of statues are usually not the sort of people who react positively to trans folks. But there you have it: a trans character from a fighting videogame is officially being marketed as a sex object.