Let me start off by saying that besides what's rated as "partial nudity" and "sexual themes" (neither of which are even at an M level) there is pretty much nothing else that could be of concern to anyone in today's society as the violence is definitely NOT at the level of an M rated game (like Mortal Kombat or GTA). It's no worse than a typical violence you find in cartoons. There's no blood and you cannot kill your opponents. It's about as violent as The Karate Kid. This is more correctly about "Martial Arts" (albeit, with some supernatural twists), than simply raw "fighting". Each character may have different motives but it really all comes off like a sports fighting tournament or a spectator sport like WWE/TNA wrestling. In fact it could even be argued that the game can be used as a good starting point to learn more about the various martial arts in the world, or at least build some interest, as each character has moves that come from their respective styles the same as they would in real life (which other fighting games of this kind also do). If not for the showing of skin in this game, I am sure it would otherwise be officially rated a T.
Now, about the "showing of skin", it should be noted that not only can the women be selected wearing skimpy outfits, but equally, the male characters can also be. But I wouldn't go as far as to call any of this sexual content. Would anyone reading this consider themselves to be sexual content when they go for a swim in their bathing suits? Even if they are as a attractive as the characters in this game are made to be? All the characters can be made to show a lot of skin in this game, but whither that is "sexual"/"sexy" or not is up to the viewer. I know plenty of people who find their characters more sexy wearing more clothes. Should we label a game with Disney Princesses of having sexual content? Sure the breasts wobble in this game, but they do so in real life too, and on top of that their movement can be restricted by what they're wearing (hey, if we're moving towards total realism in the virtual world one day, you can't deny that this falls under that realism). I truly believe that if this is why you wouldn't allow someone under 17 to play this game, then I'd fully expect you not to allow them to go to the beach either. But I will not deny that there is SOME sexual content in this game, but only because some characters are more sexual than the others are, such as Tina Armstrong who intentionally does one or two poses to appear more sexually (as a reflection of her character), regardless of her attire. Definitely nothing worse than what you'd find in a PG-13 film, though. Now, if you truly believe that showing a lot of skin is an inherently sexual thing (and that by puberty it'd somehow be better to not even be thinking about the body of the opposite sex), then you should also know that the skimpier outfits are optional and aren't even usable until you actually buy them through DLC or, for a select few of them, after completing very difficult tasks. Every character has perfectly G rated costumes (even more character with more sexually liberated personalities like Tina or Christie) and you can even turn off the breast movement completely in the options menu if you want them to be more like plastic dolls (personally I think it's wrong to include this option at all as it just makes it seem like it's somehow wrong that breasts should be able to move).
I mentioned characters having characters and personalities before and I'd like to bring that back up. It's because of this that I truly believe this game doesn't need to be restricted to adults. I say this because that if you are one to fear about players seeing characters as "objects", then I would say you shouldn't have to worry about this in this game. I've known far too many people, male and female, who talk about the opposite sex in a demeaning and degrading manor, especially when it comes to sexually open people. I am not one of those people and I truly believe I owe it to games and other media with content like this. I see people who don't like this game calling the characters "sl*ts" and "wh*res" just because of what they're wearing, and yet I play this game and never use those words to describe any character. Those are two words I never use on anyone in my life. I see the characters as attractive yet strong (especially the female characters), with personalities and feelings, and in some ways I even look up to them. Characters like these inspired me to learn to take better care of myself physically, to be the best that I can be, and encouraged me to be a stronger person. But I also understood these characters were fantasy characters and a part of a fictional story and world. It is, after all, a game in the end. If I play any game or watch any film with a kid I always use it as an opportunity to teach them something, help them understand what I believe is right and wrong about it (what the game does right and what it could do to be better), and I just generally help them understand whatever subjects are brought up. The key is to play with your kids, which is what I would say in regards to any and every game, even Mario games. To any kid I played this with, I did explain the rating, why it's rated M, and why I feel it's ok for them to play this game with me.
And kids are definitely capable of playing this game... even extremely well. I feel that more than any other game in its genre (3D fighting games, not 2D like Smash Bros), Dead or Alive is the easiest to learn and understand. Although I learned how to do all the moves in Street Fighter at around the age of 10, which is a game with moves that are harder to learn than most of the one in Dead or Alive, I'm sure I would have learned this game's moves before 10. It's easy to learn and get good with most characters, but hard to master, and that's where part of the fun and challenge comes from. Fighting games allow you to figure things out on your own. When you find the person you are playing with is getting the better of you, you find the time to practice on your own, learn new techniques, then come back to your opponent and see if it works. If nothing has taught your kids the value of practice yet, a fighting game like this one just might do the trick. Or, even if a kid doesn't have the interest or time to want to get good at a fighting game, this one does make it easy enough to learn and have fun with other players casually on the same level as well.
I have younger cousins, both male and female, as young as 7 who have played this with me and they're still perfectly normal, typical, crazy kids. They still watch silly Disney channel shows (which I would argue are far more harmful than this game, lol), they still go to the park with their friends, etc. They definitely still speak of other people respectfully, and I'd like to think I helped in that department. You would never think they were kids who have played an "M rated game" (in fact I find it crazy that this game shares the same rating as GTA5 and Mortal Kombat). They're actually better at the game than I am and beat me often. I myself played fighting games (some far more violent than this, such as Mortal Kombat, although I've never really liked it because I've never liked hyper-violence since childhood) with some sexual content in them when I was their age and I'm fine myself (in fact I could argue I'm better off for it). And by "fine" I mean mentally sound, sociable, friendly, educated, working, and in a dedicated relationship. I will have kids of my own one day and I will definitely play this game with them.
EDIT: Oh, and I forgot the photo mode, probably because I feel this is a moot point but since the rest of the site seems to think it's a concern then I'll address it too. Even my youngest cousin has used the photo mode, although he never even knew it existed for months. He only used it once and he took perfectly innocent shots of the fighting. I'm sure he doesn't even know he can zoom into the breasts and butts of the female characters if he really wants to (if that was the case, I wonder what would happen if I ever gave him a real camera), and he probably won't realize that for a couple of years (unless he turns out to be gay, who knows? What do parents of homosexual boys worry about, I wonder... would they keep this game away from them too because of sweaty muscular guys in shorts?).