Software Addictions

Story image for Software from Bloomington Pantagraph

The June 13 issue of Forbes, which includes a profile of the Korean videogame company NCSoft, may generate some hankering by investors to participate in the next software success. But where are the good buys?

You could have more than quadrupled your money buying either of two big videogame companies five years ago: Electronic Arts (EA) or Activision Blizzard (ATVI). They are solid moneymakers now, but their value hangs on entertainment habits, which could change.

I think you’re better off betting on software that locks people into business habits, which are harder to change. Microsoft (MSFT) and Oracle (ORCL) have their clients addicted to particular databases and office procedures. They’ll be coining money long after gamers have gotten bored with Star Wars Battlefront and Destiny 2.