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Media Forensics was established in 2002 by Tim Christian and Faye Sieracki. Based in London, but with recently announced plans to expand into North America, the company offers a royalty auditing service for videogame developers and publishers.

As Christian explains in this exclusive interview, Media Forensics specialises in analysing and auditing royalty and distribution agreements to ensure companies are paid in full.

Clients include Bethesda, Criterion, Rebellion and Blitz Games, and Media Forensics reports a 100 per cent success rate in finding previously unreported royalties.

Read on to find out more about the service the company offers, the way publishers' attitudes to auditing are changing and Media Forensics's move into the US.

Tim Christian: We are royalty auditors. We work largely with developers, and we audit the the royalty statements that the publishers have sent the developers. This is to make sure the developers are getting paid the right amount of money according to their contracts.

So you're providing a service for developers, primarily?

Largely to developers, and to some of the smaller publishers who then use the bigger publishers to distribute through.

How often do you find that publishers owe developers money?

We always find previously undiscovered royalties, or previously unreported royalties. Sometimes we will find an error that goes the other way. What we're looking for are errors. It's not fraud - largely, just errors and inefficiencies.

In all of the jobs we've undertaken, there are only two cases where we haven't actually covered the cost of the audit by the amount of money we've found.

What would you say to developers who are interested in the service that you offer, but are concerned that it might damage their relationship with a publisher who they still have deals with?

A few years ago that could have been the case, but I think that there's a much more even playing field now.

Two things have happened that have been really important. Firstly, developers that have survived have gotten much bigger, much more commercially savvy, and may have third-party shareholders who are VC investors. From their point of view it's a corporate governance issue; they need to know that things are being done properly.

The other issue is that a lot of developers these days are also buying in third-party properties; they're licensing, then they go with the game to the publisher. So the developers have to account to their third-party licensors for those properties, and the third-party licensors want to know that things are being done properly.

Do you find that when Media Forensics turns up at a publisher's office, you get a negative reaction?

I think that's changing. Clearly we're not welcomed with open arms because we're there to serve a purpose for a client who is a developer.

More and more of the publishing community are realising that audits will happen as a matter of course, and they're organising themselves for it.

You say you're the only business of this type for the games industry, whereas there are several companies doing what you do in the the film and music industries. Why do you think that is?

I think we're the only significant independent company doing this in the games industry. The big accounting firms, or even the developers' own account firms, will take this work on, but they don't really know what they're looking for, because they don't have the experience we have from being in the games industry for the past 15 years.

I think it's also because we're relatively new, as well as the phenomenon of auditing publishers being fairly new. Other companies will spring up, I'm sure of it.

Are you finding that the more audits you carry out and the more money you find, the more publishers are changing the way they do their accounts?

The more responsible companies are saying, 'We were weak in this area, let's tighten up. Let's look at our processes, let's look at our software, let's make things better.'

Some of the less well organised, the poorer publishers, are saying, 'Let's wait until we get audited again.' It's just a cost to do with business.

When you find that developers are owed money by publishers, how often is it that it's the result of a series of mistakes, and how often has that money been deliberately witheld?

It is very rare that we find it's fraud, where a process has been set up to deliberately not report the correct figures to the developer. In 95 per cent of cases it's purely because the systems haven't kept pace with the growth of the publisher's business, and things fall between the cracks.

Do you offer any guarantees to developers that you will find money for them, or that you won't find in the publisher's favour?

No, absolutely not. We have no idea until we actually go in and start looking through the books and records. All I can tell you is that in our experience we have a 100 per cent record of finding previously undisclosed royalties.

You recently announced your expansion into America. Will you be competing with other auditors there, or is the situation similar to that in the UK?

We already work for American developers in Europe, and we've worked for European developers over in the States. Each time, people say to us that there's a lot of business to be done here.

We're now at the stage where we've announced that we're going to be taking the US more seriously, that we're going to be looking for people to work with, and we hope to pick up more business with American developers, auditing American publishers. We think it's a big expansion opportunity for us.

How do you think things stand for developers today, compared to ten years ago? Do you think the industry has matured?

The industry has grown hugely. The level of maturity is probably a subjective issue...

From a development perspective, some of them have survived and gotten bigger, and they've brought in commercial managers in certain areas of the business. The publishers have grown as well; the main ones are all now publicly quoted, so it's a much much bigger business.

It's not half-a-dozen blokes setting up on their own, hoping to get a gig in six months time but putting a few demos together in the meantime. Because of the sums involved, you can't do that anymore. Publishers are looking for developers with a track record, and developers are looking to work with publishers who also have a track record.

Are you concerned that eventually publishers will have all their records in order, and that there won't be a need for your company anymore?

I think the nature of what we do will change. As time progresses and the auditing of titles becomes a much more standard, once-a-year thing, then - in theory - we should find less and less errors, and we'll change to accommodate that.

At the moment we're still establishing new relationships with developers, we're still going to see publishers we've never seen before, and it's all very exciting.

Do you think the growth of digital distribution could have an impact on the way that publishers do business, and the way that you do business?

I think it will, and that model will mirror the way we audit mobile games publishers, because you're really talking about downloads.

Having already done that kind of work, we know it's equally prone to misinterpretation of contracts, of royalty statements not adding up, and of information from the mobile phone operators not being correct - so there's still work to be done there.