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I think you're right. The Sims is a perfect example of why games with more violence and sex will not necessarily draw more people to game. My friends who do not play games do not want to play GTA3 when they come over, but they want to play something like Super Monkey Ball, which is incredibly cartoonish in nature.
I think people misread the success of GTA3 having to do with the sex and violence. In my opinion, the game would sell just as many, if not more, copies without those elements. The game has been such a huge hit because it offers a gaming experience that had never been experienced before. While it does make good use of its mature rating, I think it is unfair to say that is what made it a success, or that it even contributed highly to its success. People play games that are fun.
While I think MGS2 is a blast, a game like Sly Cooper comes along and shows many of the same elements can be done without the "adult" theme, and still be a great game.
I think the market has room for all kinds of games, but publishers are fooling themselves if they think sex and violence will draw in an audience that doesn't normally play games. Unique, non-traditional game types will, however.
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