Oh definitely.
I do think in Flynn’s Grid– once he had a good idea of how the whole “programs-manifesting-in-human-form” phenomenon worked and how he could adjust it– he probably programmed a LOT of genitals in there on purpose
I also think programs that “manifested” naturally– however that happens in the Encom system– would have a LOT of individual variation in how their anatomy appeared.
And I do think some of them would end up with humanoid genitals!
…Or something weirder. Who knows what these guys have.
But yeah, in case you’re curious about my own headcanons regarding Program genitalia:
Tron and Ram have the standard null arrangement; their circuitry and disc are the most sensitive erogenous zones. (Tron’s sex drive is focused mainly on his User, while Ram is an everyone-pleasing little slut. Both will happily use erotic circuit-stimulation to express their deep affection for each other. And for Yori.)
Yori is a Simulation expert with proven aptitude at magical-girl-style shapeshifting. She not only uses that to adapt her own anatomy to whatever the sex scene requires, she’ll also adapt her partners however they wish
Sark has human genitals by default and has never felt any need to change them. He correctly speculates that this is an arrangement that echoes Users, and he likes how it gives him a sense of User power.
MCP has no genitals only energy-transfer, and can do a whole lot with that, both pain-wise and pleasure-wise. He uses both sides of that primarily just to manipulate others.
Crom of course has the six tentacles. (Enough extra digits to count in hexadecimal– very useful for a compound interest calculator.)