I am working on building a Strategy Game (it will be in 2.5D), and for graphic design part we are using Illustrator and Photoshop for designing (including designing characters). Now we want to start building 3D modeling for characters to simplify the animation process. It seems photoshop does not support 3D modeling, so what tool would you recommend in this case?
I have been modeling 3D characters for many years, and the best tool I can recommend to anyone, beginner or not is actually a free opensource program called Blender.
It has many useful features and is easy and quick to learn, but the best part is the amount of keyboard shortcuts it has as standard to really speed up development time. You can create your mesh, animate it, texture it and map it in many, many ways just using the one program. It also has its own game engine that uses Python script, but you don't need that for model creation, and the best part is that it's free!
As a side though, ZBrush is also a great tool, it has many unique features of its own that none others do, like the ability to literally draw your 3D mesh, (it's especially great if you have a wacom tablet or similar) but it's a bit harder to master.
I'd recommend building your mesh in Blender, then (if you can afford it) use the texturing tools in 3DS Max or Maya as they have some really amazing texture and mapping tools.
But for free, Go with Blender to start with.
If you don't plan to become a 3D expert, you can quickly design stunning characters with the free software DAZ3D.
You will have for free a very versatile human model that you can morph to your needs (male/female, tall/short, etc...).
You also have access to a lot of ready to buy costumes or props in case you don't want to design them yourself (if you go this way, be sure to get a platinum club subscription. It gives you access to thousands of articles at a reduced price of 1.99$ and you can cancel at anytime)
Edit: to get an idea of what you can do, search "daz3d tutorial" on YouTube
I have used Cinema 4D alot and I love it. Works like a charm. For me, It was extremely easy to get the hang of it and use it properly.
Shade 3D has a free version called Shade 3D for Unity. You can build models, animate them, and freely exchange them back and forth with Unity 3D for testing purposes. It also works great with other development tools.