Alright, you claim its not true, prove it. Find a game with full frontal nudity(that isn't a deformed monster/creature of some kind) that is rated M or lower by the ESRB.
that is an impossible task. As we've been discussing on this very thread, there aren't really any games with full frontal nudity.
That is not necessarily because of the ESRB, it could also be because full frontal nudity is rare in media in general. Particularly in modern media, media was less shy in the 80's when films like Terminator, were all like, look people are naked, deal with it.
Only recently has it become possible to render people fully nude in games (without them looking like sex dolls) and now all forms of media are less quick to have full frontal nudity.
If we have today's level of technology in the 80's, then I'm pretty sure Schwarzenegger's penis would've been rendered in the Terminator 2 game.