The plot continues to thicken in the ongoing battle between the former leadership of Subnautica 2 studio Unknown Worlds, and parent company Krafton, now with the studio’s founders alleging in a lawsuit that Krafton went out of its way to hinder Subnautica 2’s development, delay the game, and ultimately fire them from the studio after it learned it may have to pay out a $250 million bonus to employees if the game were to be released on time.
In a newly-unsealed complaint reported by Bloomberg and shared by Aftermath, former Unknown Worlds CEO Ted Gill, and fellow co-founders Charlie Cleveland and Max McGuire claim their relationship with Krafton, as well as the development of the game, was all going well up until early 2025, when the leaders presented Krafton with new revenue projections that suggested Subnautica 2 would do better than they initially anticipated. They also say they tried to negotiate for developers who had joined the team later and were not currently eligible for bonuses to receive them.
The former leaders claim that upon learning this, Krafton began to suggest the game be delayed, allegedly combing through contracts to determine if they had a legal standing to force a delay, despite the contract saying the decision lay with Unknown Worlds. They say that Krafton even went so far as to take action to make it difficult or impossible for it to release on time. Krafton began offering feedback that the game was not ready for its early access launch, pulled marketing materials, and refusing to follow through on certain pre-launch commitments. Ultimately, the founders say this culminated in Krafton letting the three of them go earlier this month and officially delaying Subnautica 2.
While Krafton has since extended the bonus period for the remaining employees to receive their earnout if targets are hit, notably Krafton has claimed that the former leadership was eligible for 90% of the bonuses, meaning Krafton would only have to pay a maximum of $25 million if targets are met, not $250 million.
The founders’ lawsuit accuses Krafton of breach of contract and demands payout of the full bonus promised as well as damages and other costs.
The drama around Subnautica 2 kicked off earlier this month when Krafton announced suddenly that it was replacing the three founders with former Striking Distance CEO Steve Papoutsis effectively immediately, which Gill, Cleveland, and McGuire claimed was a “shock” to them. In the following weeks, reports have emerged regarding the $250 million bonus promised to staff, and Krafton has made statements accusing the former leaders of neglecting their duties and saying that Subnautica 2 was not in an acceptable state for launch. In particular, Krafton alleged that Cleveland was told to stop devoting time to a personal project and focus on his duties at the studio. The lawsuit, filed last week, counters that this personal project was a Subnautica film, and was worked on at the explicit request of Krafton.
The readiness of Subnautica 2 remains an open question. Leaked documents since verified by Krafton confirm that Unknown Worlds was receiving feedback from the publisher that the game was not ready for early access launch. However, a report from Bloomberg that sources developers on the project, as well as the lawsuit from the founders, suggest it was in good shape.
Rebekah Valentine is a senior reporter for IGN. You can find her posting on BlueSky @duckvalentine.bsky.social. Got a story tip? Send it to [email protected].
