Goldman Sachs: AI-native games gain popularity in succession, creating an opportunity for XD’s TapTap platform

What new signal does Yousongwu offer?

Following the popularity of She Shen Chu Di in September, TapTap-exclusive Yousongwu also quickly gained attention. The product combines character creation, dress-up, animated expressions and desktop pet features, centering on user-created characters and shareable content.
According to data cited in the report, Yousongwu topped TapTap’s trending chart within days of testing beginning on 29 October 2026, with a platform popularity score of about 450 thousand, more than 400 thousand followers and a displayed rating of 9.5.
Goldman Sachs previously observed that She Shen Chu Di boosted TapTap traffic. The popularity of the new product further supports the bank’s view that lightweight content created with AI assistance has the potential to bring more visits to the platform.

Goldman Sachs believes AI tools lower development costs and barriers, making more experimental gameplay possible. As the supply of high-quality small-scale and casual games grows, TapTap has an opportunity to expand beyond its traditional core gamer base to casual users.
TapTap already has a player community and relatively accessible game publishing and distribution capabilities. As content increases, Goldman Sachs believes the platform’s role in helping users discover games and helping titles reach users could become more prominent.

TapTap Maker lets creators make playable games using natural-language descriptions, with AI assisting with programming, art and music. The games can then be published directly on TapTap.
Goldman Sachs believes this provides a foundation for the platform to expand from game distribution into creation, publishing, operations and monetization: creators provide content, content attracts users, and user preference data can help improve recommendations.
The key to this path is whether AI games can bring in new users and increase activity, whether the platform can select and distribute quality titles from a larger content pool, and whether creators and the platform can establish a sustainable monetization cycle.

Goldman Sachs expects XD’s revenue growth to accelerate in the second half of 2026 and revenue to grow by double digits in 2027. Its model forecasts revenue of 7.158 billion yuan in 2027, up 10.5% from the 2026 estimate of 6.476 billion yuan.
Profit improvement will not follow a straight line: Goldman Sachs expects net profit including special items of 1.587 billion yuan in 2026, below the 1.629 billion yuan recorded in 2025; it expects a rebound to 1.838 billion yuan in 2027. The performance of older games, progress in TapTap monetization, and the balance between research and development and marketing expenses and revenue growth will all affect profit margins.
Goldman Sachs maintains its buy rating and 12-month target price of HK$60.70. The target uses a sum-of-the-parts approach, applying 2027 estimated price-to-earnings multiples of 13 times and 17 times to the games and information services businesses, respectively.