Dear Jenny -
Yes, video games are certainly known to portray sexist images of women and this is one of the reasons why boys play video games in much higher numbers than girls - because the games are made for them. Some people have attempted to counter this by creating games for girls - like Girl Games and Purple Moon. However, the problem with these companies is that they essentially took the games and painted them pink thinking that would attract girls. It didn't work.
I don't think there is a magic solution yet, but people are trying. I hope you took the time to tell your friend how inaccurate those images are. Now, perhaps he'll think differently about playing them. As you said, it's not that that image is wrong-it's wrong when it's the only image we have of women. The same goes for the skinny, tall, blondes in all of the fashion magazines. Nothing is wrong with those images, but it's wrong when we don't have a great range of images.