Quote: "I wasn't suggesting Tolkien invented these characters but only the characters in his books seem to be used; where is the griffin, phoenix, cyclops, hydra, minotaur, etc. No one uses the old myths and legends of which there are thousands, they just stick to the dwarves and elves that Tolkien wrote about."
I can see your point. I think the Might and Magic series used those, at least I know I fought a Griffin in Might and Magic VII and some cyclops in Might and Magic: Dark Messiah

. Oblivion has minotaurs when your character is at a higher level or you're near where the Unicorn lives.
There are plenty of mythological creatures out there - I know the Final Fantasy series rips off just about every mythology out there - I was surprised to see a Humbaba in Final Fantasy XIII, it looked absolutely nothing like Humbaba, but at least they were going for a little more variety. Mind you, it was Gilgamesh that killed Humbaba, so as they've already used him, it makes sense.
In these Western RPGs, it is the Tolkein-esque thing they go for, yes, the mythology pre-dates his work, but game designers know how popular Tolkein's world is and can thus earn more of a profit knowing people respond well to what's familiar and what they know. I suppose the thing I didn't like about Dragon Age, for example, is that it's humans, dwarves, elves and mages in towers off to fight some great evil force from an evil realm with creatures that seem very much like orcs and Urukhai (sp?). Not in the least bit Tolkein-like? A fun game still, but horribly cliched.
I think I might make a plan for an Ovidian fantasy RPG, sure the Roman mythology was used in the Golden Sun series, but it'd be interesting to take Ovid's approach. I've been itching to do something again.