From my experience playing and recently starting development with one, it's not wrong to say you might have more luck pulling players in a market oversaturated. Otome and dating games have been around for a while, and there's still a lot to explore and push the boundaries with when it comes to them. Which leads to another point being that your heart just has to be in it. I don't think a genre's popularity will make or break whether it's a good game or not. And for dating games, you have to have a good story, mechanics, and visuals.. just the works, really. In other corny words, the thought and effort behind a game is just as important as a genre, whichever one you apply it to.
There's also the distinction of whether you want returning players or just 65 as a goal. The reason why the dating/otome games market is so oversaturated is because of the fact you usually play them, finish the storyline, obsess over the characters, and then move on to the next. It's like interactive fanfic or VN's; you play for the story and attachment, but ultimately you'll find another story or continue looking for things like it, If you're looking for something more long-lasting, then that would require different mechanics, maybe some other aspects mixed in the sim, or even pacing the release of certain routes or chapters.