On the other hand, if you intend to make a game for a playing, and possibly paying, audience, this is my advice.
How Smutty should you make Your game?
Before you can even approach this question, first you'll need to decide:
WHO is your target audience?
A specific niche of players.
As broad a playing audience as possible.
What Age bracket?
What Type of Gamer:
Those who prefer Story over Game-play.
Those who prefer Game-play over Story.
Those who prefer Story and Game-play equally balanced.
Those who prefer Art Galleries with as little story or game-play as possible.
What kind of Story do they prefer?
Comedy of Errors
The wonderful thing about smut is that it can be used in any genre.
Once you know WHO your target audience is, how smutty you should make your game depends on these major factors:
1) Your Target Audience and THEIR Expectations.
What level of graphic smut does your target audience EXPECT in their games?
Designing your game toward what your target audience likes and wants is the easiest and most effective way of guaranteeing that they'll adore your work.
As a professional erotica author, my target audience are the readers of my novels. They expect extremely detailed xXx work from me because that's how my novels are written.
2) Your Skill Level in Art and/or Writing.
Can you draw or write Good smut?
Realize your strengths, but more importantly -- your weaknesses. Your weak areas are where you're going to need to be the most Creative to ensure that those weaknesses don't drag the rest of the project down.
I don't have the artistic skills to draw smut well, but I do have good Photoshop skills, and the skill to write very good smut, so I handle my smut scenes with one static R-16 (suggestive) image paired with very detailed R-18 text. This has proved very effective for me because a static image does not distract my audience from the extremely detailed smut they are reading.
3) The level of smut YOU are comfortable producing.
How smutty are you willing to go?
I'm comfortable with any level, from sweet romance to xXx smut of the M/F, M/M, F/F, and M/M/F varieties, but that's just me.
If you are not comfortable writing or drawing smut Don't Do It because that discomfort will show in your results.
4) The Story.
Would smut Add to the story, or Ruin it?
Smut is all well and fine, but if your game doesn't actually need a full-on smut scene to get its point across, then a simple kissing scene is smutty enough.
Out of the seven games I've made, two are not R-18 because those two games would not have benefited from R-18 material. In both cases, smut would have distracted the players from the actual point of those games.
Make the Smut COUNT!
Just like every other element in your work, Smut needs a purpose, a reason to be in the story.
The type of smut a character prefers, and how they choose and gain their partners, can easily be used to reveal a character's Base Personality: tender, sweet, attention to detail, aggressive, humorous, serious
Smut scenes are an excellent tool for visible demonstrations of a couple's progression from mere passionate attraction to protective and supportive love. They can also demonstrate the downward spiral of a destructive relationship, such as one that starts with attraction and ends with irrational obsession.
Make something Happen:
The best way to make smut work in a story is by having the smut trigger a shift in the plot. The traditional use for smut in Romance fiction is to make or break a relationship, but that's not all it can do.
Smut can cause Transformations.
Vampirism and Lycanthropy as STD (Sexually transmitted disease.)
Demonic or Spiritual possession as STD
Smut can trigger or grant Psychic or Magical ability.
The classic hentai game Bible Black uses this.
Smut can be a Distraction that allows someone else to accomplish something nefarious.
The modus operandi of the classic Femme Fatale.
Smut can show a radical change in a character's Personality.
The classic Gothic novel, Dr Jekyll and Mr Hyde does this.
When used cleverly, smut can be an amazing tool to enhance a story. However, when used badly, or worse; as an afterthought, ("Oh hey, let's add some smut scenes!") smut can utterly ruin an otherwise entertaining game.
The absolute worst thing a creator can do is have smut scenes tacked-on at the end of an otherwise PG rated game. This rather ugly trick is used specifically to attract players who prefer adult content. Doing this is the lowest form of cheating because it's False Advertising, also known as pandering.
Don't cheat your players! If you're going to make a game with smut in it, design it to be smutty from the very beginning by making those scenes necessary to the story.