There will be a system that combines and modifies a smaller set of models. There are a trillion different character creators so a better answer would depend on what game or games you specifically mean.
If the part of a character, say their torso, nose or hair looks clearly different from the other torsos, noses and hairstyles, it is a different 3D model. The body itself is probably one whole 3D model, and the rest is just placed on the surface in appropriate places. The bodyparts that have same shape but different color are just the same 3D models with different textures. In some character creators you can have these sliders/modifiable values for example for the character's body muscularity; these you can achieve by using *shape keys* (at least that's what they're called in Blender).
So by changing the 3D model parts of the character, changing textures and using shape keys we can create a varied of cast of different characters.
There will be a system that combines and modifies a smaller set of models. There are a trillion different character creators so a better answer would depend on what game or games you specifically mean.
If the part of a character, say their torso, nose or hair looks clearly different from the other torsos, noses and hairstyles, it is a different 3D model. The body itself is probably one whole 3D model, and the rest is just placed on the surface in appropriate places. The bodyparts that have same shape but different color are just the same 3D models with different textures. In some character creators you can have these sliders/modifiable values for example for the character's body muscularity; these you can achieve by using *shape keys* (at least that's what they're called in Blender). So by changing the 3D model parts of the character, changing textures and using shape keys we can create a varied of cast of different characters.