Nintendo's Toad Characters May Actually be Transsexual, Not Genderless
Despite having clear indications of gender, Nintendo's producer Koichi Hayashida states that regardless of gendered characteristics Toads are a genderless race. In addition, Toad and Toadette are not romantically involved with one another because Nintendo never settled on a specific gender for the Toads.
The simple fact that Toads show the appearance of identifying with a gender disproves that they are genderless...
I have come to the conclusion that Toads suffer from GID or Gender Identity DIsorder; a confliction between a person's physical gender and the gender s/he identifies with. According to research  , GID is relatively rare condition of atypical gender development in which there is a psychological perception of self as masculine or feminine which is incongruent with ones phenotype. The simple fact that Toads show the appearance of identifying with a gender disproves that they are genderless, as Hayashida states. The definition of Genderless is lacking qualities typically associated with either sex according to Merriam-Webster's dictionary.
In 1994, the DSM-IV replaced the term Transsexualism with GID, validating that Toads are indeed transgendered. This isn't the first time Nintendo has displayed a transgendered character either. Birdo, a pink red ribbon-wearing dinosaur from Super Mario Bros 2, was described in the game's manual as "He thinks he's a girl...."
Nintendo may not have stated they are either sex, but placing characteristics of a gender on the lovable Toads does mess with our heads. Or maybe they just don't want to admit the truth?
Some may say that because the Toads don't have a physical attraction to the opposite sex, they can't possibly be transgendered but should be asexual. In the most simplest of context, transgender is the ideal "of or relating to people who have a sexual identity that is not clearly male or clearly female."  Because of the confusion because of the gendered characteristics of Toad and Toadette, asexual doesn't hold true because it means not having a sex which was the previous concept when they all looked alike. In addition, Nintendo states they are not siblings, which may entertain the notion that maybe they need to avoid the idea of incest while alluding to reproduction?
“This is maybe a little bit of a strange story, but we never really went out of our way to decide on the sex of these characters, even though they have somewhat gendered appearances, but I think what I can say is that Toadette and Toad are not siblings -- perhaps it would be more accurate to say they are adventure pals. And that’s certainly true here [in Captain Toad].”
Adventure pals indeed! I mean, whom else are they going to swap clothes with? With as many Toads as their are in the Mushroom Kingdom, it's nice to have a couple of closets to choose outfits from! Nintendo, a company still conservative in its references to gender and sexuality, seems to believe that publicly stating Toads as 'genderless' will mask the truth. Let's face the facts Hayashida, Toads are trans and Nintendo is FABULOUS!