I'd say you need both: you need to want to do a game you'd want to play, because you'd have an easier time recognizing if you're doing something that would appeal to at least one person. And if it's in a niche, you'll have a better chance to get coverage and buyers. But if you just try to hit a niche hard without knowing what makes the games in that niche good, you'll have a hard time making something that'll interest players.