Evaluation of Market Potential and Investment Value of Paper Games and Domestic Otome Game Track

Based on research and analysis, I will systematically evaluate the market potential and investment value of Paper Games and the domestic otome game track from the following five aspects:

1. Paper Games Company Fundamentals and Valuation (Unlisted Company)
2. Otome Game Track Market Data and Growth Potential
3. Investment Value and Accessible Investment Paths (Including Listed Company Mapping and Industry Chain Opportunities)
4. Competitive Landscape and Key Players (Including Major厂商 Layout and Mid-Tier Performance)
5. Core Risks and Uncertainties
6. Comprehensive Evaluation and Executable Recommendations

In the main text, I will clearly distinguish between market data (based on web searches and brokerage API data) and logical deductions, and add confidence level indicators to all non-consensus views.

First, here are the core conclusions based on verifiable facts:

• Market Size and Growth Rate: The size of China’s female-oriented game market in 2024 was approximately 8 billion yuan, with a year-on-year growth of 124.1% [1][4]. The annual total revenue of Love and Deepspace in 2024 was approximately 5.87 billion yuan [1]; in 2025, it ranked second in the global two-dimensional game revenue ranking with 360 million USD (approximately 2.5 billion yuan) [3].
• Paper Games Fundamentals: It is an unlisted company; public information shows an estimated valuation of about 8.5 billion USD; its 2024 revenue scale was close to 1 billion USD [5].
• Direct Investment Path: As it is not listed, it is currently impossible to directly buy Paper Games’ equity in the secondary market; attention can be paid to relevant listed companies (Tencent, NetEase, etc.) as well as “Guzi Economy” and IP derivative opportunities.
• Confidence Level: Market size and revenue are public data with high confidence; company valuation and revenue come from media reports and industry estimates with medium confidence.

The following is a detailed analysis (in-line references are only used to indicate the source of data and views).

1. Paper Games Company Fundamentals and Valuation (Unlisted Company)

• Company Overview: Founded in 2013, focusing on female-oriented games; representative products include the Nikki series and Love and series [5][1].
• Valuation and Revenue: Media reports estimate a valuation of about 8.5 billion USD, with 2024 revenue close to 1 billion USD [5]. Note that this data is unaudited and may have time lag and caliber differences.
• Financing and Equity: No latest financing information has been disclosed through public channels; no clear IPO schedule or stock code has been seen.
• Conclusion: As a leading player in a high-boom niche track, Paper Games has strong cash flow and IP monetization capabilities, but currently lacks an open secondary market buying channel. If IPO or equity transfer plans are disclosed later, its valuation and profit quality need to be focused on.

2. Otome Game Track Market Data and Growth Potential

• Market Size and Growth Rate: The size of China’s female-oriented game market in 2024 was approximately 8 billion yuan, with a year-on-year growth of 124.1% [1][4].
• Product Performance: Love and Deepspace had an annual total revenue of approximately 5.87 billion yuan in 2024 and ranked second in the global two-dimensional game ranking in 2025 [1][3]. On the user side, as of August 2025, its global registered users exceeded 80 million and topped the bestseller list in multiple countries/regions [3].
• User Profile: Mainly young women in high-tier cities with high education and certain consumption capacity; over 60% are single [4][7]; emotional companionship and emotional value are core needs [1][4][7].
• Niche Penetration: Extending from otome romance and ancient-style dress-up to broader categories such as simulation management and search-ride-hailing [8].
• Forecast: Based on the increase in the proportion of female users and content consumption upgrading, the track still has high growth potential in the next 2-3 years (confidence level: high), but attention needs to be paid to the impact of content supervision and rapid changes in user preferences on sustainability.

3. Investment Value and Accessible Investment Paths

• Direct Investment: Paper Games is an unlisted company and cannot be directly bought in the secondary market; equity participation requires waiting for IPO or equity transfer.
• Listed Company Mapping:
  1. Tencent Holdings (0700.HK): Its Twilight of the Love has stable performance, and its social/content distribution system can undertake otome game traffic and emotional economy; it is necessary to evaluate the weight and elasticity of female-oriented business in its庞大 business matrix.
  2. NetEase (NTES): Products such as Beyond the World and Time and Space Painter occupy part of the market share; its long-term operation capabilities and IP reserves are worthy of attention.
  3. Mihoyo (Unlisted): Products such as Undecided Event Book exist, but their proportion in the company’s overall business is limited.
  4. Others: Some “new consumption” and game companies in A-shares/Hong Kong stocks have layouts in “Guzi Economy”, IP peripherals and content communities, but their real exposure to the otome track needs to be identified one by one.
• Industry Chain and IP Economy: The market size of “Guzi Economy” reached 168.9 billion yuan in 2024, with a year-on-year growth of over 40% [4]; Paper Games’ Xinyi Flagship Store ranked first in Tmall’s Double 11 Trendy Toy Sales List [7]; peripheral derivatives, co-branded products and offline activities constitute the second growth curve (confidence level: high).
• Forecast: Under the current public information, the most practical path is to “indirectly” participate in the track’s growth through large game and content platform companies, and pay attention to the industry chain companies of “Guzi Economy” and IP monetization.

4. Competitive Landscape and Key Players

• Leading Players:
  1. Love and Deepspace (Paper Games): Leading in revenue and number of top rankings, outstanding in technology and art expression, strong IP spillover capability [3][7].
  2. Twilight of the Love (Tencent): Remaining in the top 2 of the female-oriented market for many months, its revenue once surpassed Love and Deepspace to top the list in November [7].
• Mid-Tier Players:
  1. Code Yuan and Beyond the World: In 2025, their rankings and presence declined due to controversial events and operation crises [7]; Beyond the World showed signs of bottoming out later but its sustainability remains to be seen [7].
• New Products and Innovation: Few new otome games have truly emerged in 2025; the market presents a structure of “stable leading players, mid-tier players being cleared, insufficient supply”, and the threshold for new games to break through is high [7][9].
• Forecast: The industry will become more concentrated, and content and operation capabilities will become decisive factors; small and medium-sized manufacturers will face pressure on survival space without IP and technology support (confidence level: medium-high).

5. Core Risks and Uncertainties

• Content and Public Opinion Risks: Otome games have extremely high requirements for “female consciousness” and respect for female players; lines, plots, and operation measures are prone to causing controversies and public opinion crises [4][7]; historical cases show that relevant events can significantly affect retention and revenue.
• Regulatory and Compliance Risks: Some themes and performance scales are at the compliance boundary; it is necessary to carefully evaluate the impact of policy changes on content review and launch rhythm.
• Rapid Iteration of User Preferences and Aesthetics: Highly educated female users have continuously increasing requirements for plot depth, art performance and emotional supply; it is difficult to maintain stickiness by simply piling up materials.
• R&D Costs and Long-Term Operation Pressure: 3Dization, high-specification art and real-time interaction significantly raise the production threshold; long-term operation requires continuous output of high-quality content, which has high requirements for production capacity and rhythm control.
• Track Valuation and Emotional Premium: Paper Games’ valuation and expectations have fully reflected the high boom of the track; if subsequent new products or profits fail to meet expectations, there is a risk of valuation correction.

6. Comprehensive Evaluation and Executable Recommendations

• Market Potential: China’s female-oriented games still have room for improvement in user base, payment willingness and ARPU; coupled with “Guzi Economy” and IP derivatives, the mid-term (2-3 years) track growth has high certainty (confidence level: high).
• Paper Games Target: As an unlisted company, there is currently no direct buying path in the open market; it is recommended to continuously track its IPO trends, financial disclosure and new product pipeline.
• Secondary Market Entry Points:
  • Priority attention to leading companies with platform capabilities and content ecology: Tencent Holdings (0700.HK), NetEase (NTES); it is necessary to dismantle the revenue proportion and elasticity of their female-oriented business instead of betting on the whole.
  • Attention to IP peripheral and “Guzi Economy” related companies: Consumer and content companies with layouts in trendy toys, co-branded products and offline scenes, but need to identify real exposure and elasticity.
• Allocation Recommendations: Treat otome games as a “high-boom niche track” rather than a single bet target; within the positions of large game/platform companies, moderately increase the attention weight to female-oriented business and IP economy; at the portfolio level, sufficient diversification is still needed to cope with content and regulatory risks.

References
[1] The Paper - Love and Deepspace Makes a Great Contribution! Female-Oriented Game Market Size Exceeds 8 Billion (https://m.thepaper.cn/newsDetail_forward_32213186)
[2] GameNews - Category Research (https://www.gamenewstc.com/nr.jsp?_reqArgs={“args”%3A{“groupId”%3A60%2C"jpt"%3A4}%2C"type"%3A32})
[3] Toutiao - Love and Deepspace Ranks Second in Global Two-Dimensional Game Revenue List with 360 Million USD (https://mtz.china.com/touzi/2026/0105/211484.html)
[4] Guanyan Report Network - In-Depth Analysis of China’s Female-Oriented Game Industry Status and Development Prospect Research Report (2024-2031) (https://www.sohu.com/a/860080238_121222943)
[5] 36Kr - The 36 Billion Game Tycoon Who “Understands Women Best” Is Going to “Retire”? (https://m.36kr.com/p/3530299799345280)
[6] Securities Times - Six Major Private Equity Firms Look Forward to 2026 (https://www.stcn.com/article/detail/3550076.html)
[7] Tencent News - Paper Games and Tencent Are Stable, NetEase Rebounds from the Bottom, Has the 2025 Otome Game Market Pattern Changed? (https://news.qq.com/rain/a/20251222A06Z0Y00)
[8] Discover Report - Detailed Explanation of Strong Game Categories in 2025: Micro-Horror Search-Ride-Social and Fusion Gameplay SLG (https://www.fxbaogao.com/detail/5049437)
[9] E-Commerce Review - Research on Marketing Strategies of Female-Oriented Games (https://pdf.hanspub.org/ecl2025142_1402313036.pdf)

Notes

1. Data related to company valuation, revenue and market structure comes from public reports and industry research, which may have differences in caliber and time window; please refer to the company’s official disclosure for confirmation.
2. This evaluation does not constitute any investment advice or offer; actual investment decisions should be made prudently based on individual risk tolerance, holdings and compliance requirements.