Iran NOT Joining ESRB

Correct, that has nothing to do with governmental censorship, just self regulation.  It would be just as wrong to force a company to put out AO games against their will, as it would be to force them not to.  I would be curious as to how many "potentially" AO games there are readily available on the Japanese market.  Does Sony or Ninten.... err, does Sony allow hentai-type games on the PS3?  I thought those were a PC genre alone...

Admittedly, the original stance against AO type games was out of fear of governmental regulation.  Stores wouldn't carry them, and the console giants didn't want the bad PR.  But I think the climate has changed quite a bit since then, and if sold in a manner that was restricted to kids, an AO market could form.  The ultra-mega-super-violent games could be kept behind glass, sex games could be sold in porn or sex shops, and real-money gambling games are the realm of the internet already (and you need a credit card).

However, like I said before, you can't force the Big Three to accept them, it's their choice and freedom to say no.  And maybe they do have good reasons.  Nintendo tries to keep a certain family-friendly appearance up, because that's how they want to be viewed.  I can only guess at Sony's and Microsoft's motivations, but I'm sure they have them.