Mistake Number 3: No Clear Pricelist
You believe that your solution is priceless and may add tremendous value for your clients. You are worried that some competitors might take advantage of your pricelist. If so, here are two options: Don't sell middleware, or refine your pricelist based on your core target. In any case, the most difficult exercise is, indeed, to nail down clear and simple pricing.
Remember, also: Whatever the price of your middleware, some smart engineers will tell their producer: "Naaah. I can do much better than that in less than a week!"
As a general outline, there are a few options:
Freemium. This pricing model popped up quite a few years ago and is currently the most popular. It is combined with one of the others below. Free-to-play games are also the fastest growing segment these days. Chris Anderson, in his bestselling 2009 book Free, has spent valuable time explaining why free is a very good pricing model. There are quite a few companies and organizations that provide free technology, including to the game development world.
Inexpensive middleware (sub $1,000). Your strategy is to go "commodity." Good luck: it will be tough and will require 100 percent dedication and quite some money from investors if you want to be serious about this and make a living out of your tools, especially if they are addressing a very niche market.
However, it's a fun area to be in if you just want to serve a developer community like the Unity Asset Store, without too much time investment. Remember the average salary in Western countries for qualified game development engineers (likely you!) How much do you need to sell of your product to reach break-even?
Middle class pricing ($1,000 to $25,000). This pricing applies to professional middleware developers. Some of them are spin-offs from game studios. Some successful examples in that price range, just to name a very few: Unity, Rad Game Tools (makers of the Bink video codec and tools among others), Scaleform (acquired by Autodesk), Havok (acquired by Intel), Kynogon (AI Engine and tools acquired by Autodesk), Virtools (acquired by Dassault Systemes).
High-end ($25,000+). This category is complex to enter and currently mainly consists of a happy few game engines, like Epic Games' Unreal Engine and Crytek's CryEngine. Large development houses used to trust these high-end engines, yet they now tend to consider that the price is way too high (deals negotiated around are $1 or 2 million / game, sometimes more for multiplatform).
Additionally to a software license, a pricing based on royalties is tempting for the software publisher (you). However, developers, like anyone really, don't like to share their potential revenues. Rationally, it would make a lot of sense, but a flat fee / project or a simple developer license regardless of what is built with it is much more acceptable, and might end up being much more profitable for you.
Mistake Number 4: No App Demo
Your technology is outstanding! Everybody will agree... if they see it in action. Code doesn't sell well. Be ready to create an application that demonstrates how great your program is.
This piece is absolutely critical, yet I've witnessed the problem many times with middleware providers. The demo is your best sales tool, and can go viral if done properly. If you don't have the internal resources to get the best graphic designer or game designer to work on that project, there are options:
- Provide the tech free-of-charge together with support to a talented local game studio interested in your project. There are several benefits: You get some real-life feedback on the product, often requiring adaptation; you get a first reference. Obviously, if you are able to convince some big guys, you may be able to get some cash out of this project. However, keep in mind you're looking for marketing material, and larger houses often restrict external communication channels about their projects.
- Hire a team to build the demo. There are now several ways to hire a team at low price; one of them is to use a sourcing platform like www.elance.com; another one is to go to your nearest game development school and put a bunch of students on the project. The latter option will cost you more time investment, but will also let you network with teachers and a pool of talent that could work with you down the road.
Obviously, a third option is to build a complete commercial game powered by your technology, which requires quite some resources. Epic Games, the makers of the ultra-famous Unreal Engine, have understood this very well. Their app demo is a superstar triple-A video game series: Gears of War.
Mistake Number 5: No Technical Support
This may sound like a simplistic recommendation, but I have witnessed this case many times. Licensing middleware means outsourcing code -- sometimes critical code -- to you. If your client can't reach a business guy during the evaluation, it's a very bad sign for potential buyers.
More importantly, developers must be able to access a forum or something equivalent to get rapid answers in case they hit a roadblock. If your community is very small, which is natural at first, make sure you provide a good FAQ section, and make yourself available by email -- and ideally over Skype or equivalent as well -- to answer all your clients. Respond quickly -- otherwise your potential customers will not feel at ease, regardless the quality of your product.