Startups Stack Exchange Archive

Pricing models for SDK licensing?

My startup is selling multiplatform (iOS / Android / OSX / Win) software development kits (SDKs) for mobile and desktop app makers. The SDKs help devs to faster implement some audio features in their apps (playback, recording, sound effects, sound analysis, etc.), not to have to write their own implementations.

We’ve been selling these for a flat “per-app” fee.

However, we’d like to change the model to make the kits more widely used and more affordable for independent app devs.

What are the recommended models?

Answer 8973

A common way of doing this is to make the SDK free for use for apps whose sales won't go over a fixed amount, say $100k. After that you charge a fixed amount, say 5% of gross revenue or a fixed cost structure per app. This is the format that the Unreal Engine uses, or what Unity uses.

Another option also used by Unity is to release a free subset in your SDK but charge for advanced features. Give them an easy path to upgrade, for example lots of code examples, and make that path obvious in all your literature. Offer support for the paid version, however don't scrimp on information for your free version.

Another useful tactic is to team up with other SDK's and offer a combined license at a discount. This sort of thing is most useful when you provide some of the glue code between SDK's.


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