Is my son deranged or is this normal?

I have a 7 year old son who plays imaginary violent games. I am talking very violent, like stabbing people, tying ropes around them, shooting their brains out. He plays this with both his male and female friends. He is generally a really nice kid, no behavior problems or anything like that at school or with us. His "games" however do disturb me and I don't consider myself a prude. I've done some research and read that hampering/forbidding this as youngsters can actually cause confusion, feelings the child is bad, and it to manifest and come out as adults. As for violence, we have not exposed him to crazy adult shows like Saw or anything. He has watched some shows that many boys his age have watched (ie. Star Wars, Transformers). He has other opportunities to express himself physically, ie. plays sports, outside a lot, etc. I am trying to tell him it is okay to play hunting games, superhero games, but no violent being the bad guy games. I don't know what to do. What are other parents doing? What is your opinion?