Do all games need characters?
As you certainly know, there are many games that don’t have characters at all! Abstract games such as Tetris, Super Hexagon, or Beat Saber are great examples, but also think about simulation games such as Flight Simulator, Sim City, or Cities: Skylines.
In his famous article Video Games Are Better Without Characters, Ian Bogost (game designer and author) discussed in detail the potential of not having characters at all, and how games without characters offer a great opportunity for representation and identity without explicitly portraying characters. The only character is the player, with no artificial layers designed by someone else.
I don’t believe that all video games are better without characters, although some games are. The vast majority of video games, however, use characters to tell stories, and your responsibility as a game designer is to make them come to life in their virtual world.