Sound encoding

I’m currently developing a game, and I want to keep the file size as small as possible. What sound encoding would you recommend using, that’s both small and has decent quality?

I’d like to use .wav, but these files are too big. And MP3 has royalty issues (I’m sure this wouldn’t ever come up, but I want to do this by the book).

Does MP4 suffer from the same royalty issues as MP3 does? [import]uid: 200198 topic_id: 36147 reply_id: 336147[/import]