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Posted 28 March 2012 - 10:34 AM
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Posted 28 March 2012 - 11:09 AM
It strongly depends on the target audience and if the agreement is exclusive or non-exclusive. If non-exclusive it depends on the demographics of your target customers; will you have few large businesses or many small businesses? Will it be a regional or global license? Is it irrevocable? Is it transferrable? How does succession work? All of these are important details. What rights are being transferred? Transferring only permission to use but retaining attribution can be priced much less than a license allowing any use whatever without attribution.
If it is an exclusive agreement, you need to determine all your costs and estimate the costs it would have been for them to develop it themselves, add your profit, and use that as your minimum price.
What else is going on in the agreement? Do they require indemnification against ownership claims, and if so, are you prepared to defend against them?
Consider a physics system or audio system or other library for non-exclusive terms that would require multiple work-years to develop, and you are selling to larger companies who would normally hire a group of people to write it, then charging $50,000 per license may be acceptable. Compare with WWise and Havok engines.
If your system would require several work-years to develop, under non-exclusive terms, and you are selling to smaller companies, consider a tiered pricing similar to Unity3D. There is a pay-to-use for small stuff, and a more expensive (but still cheap) pay-for-source license.
If you are selling it for an exclusive terms you will probably want to charge them MORE than it would cost to develop it. Since they are the only customers it makes sense to have them cover the entire costs plus your profits.
Check out my book, Game Development with Unity, aimed at beginners who want to build fun games fast.
Also check out my personal website at bryanwagstaff.com, where I occasionally write about assorted stuff.