Ask HN: How to price software for hardware/embedded projects?

Hi everybody,

I could use your help on the pricing subject. I am in position to work on a custom software development for a hardware project. Software part of the project is the GUI and logic that will communicate with several hardware parts (for e.g. imagine a slot machine, or any machine that you interact through the screen).

My first option is to set a fixed price for the development.

But I know for a fact that hardware companies get their profits from the margin per device assembled. So I was also thinking of setting a small price per device installed. (something like a licence fee) And then lower the initial software development cost.

But I don't know what price ranges are ok or what pricing models work in this field. Is there a norm in the industry, some precent of the device selling price? I think in the long run that this is a better option.

I would be grateful if somebody who has experience in this field could give some advice.

Thank you.