In a bombshell ruling, a court has ordered Krafton to reinstate former Unknown World CEO Ted Gill, return control of the early access release of Subnautica 2, and extended the terms under which he and his team can secure its contentious $250 million bonus.
Details of the legal complaint against Krafton, Inc. by the former leadership of Subnautica 2 developer Unknown Worlds became public in July last year. The complaint concerns a $250 million bonus payout tied to revenue targets for the 2025 Early Access release of Subnautica 2, which the former shareholders of Unknown Worlds Entertainment, represented by Fortis Advisors LLC, allege owners Krafton, Inc. sought to avoid paying out by delaying the game using “pressure tactics.”
In its defense, Krafton accused the three former leaders of then threatening to self-publish Subnautica 2, “releasing it without Krafton’s backing, marketing, promotion, or distribution.” This, Krafton claims, left it with “no choice but to terminate their employment,” along with allegations that Max McGuire, Ted Gill, and Charlie Cleveland downloaded tens of thousands of “company files” and emails in the lead up to these terminations. The founders strenuously deny this, and claim the publisher “chang[ed] its story mid-litigation about why it fired the founders and seized control over Unknown Worlds.”
Krafton then filed two further legal documents after the founders and former leadership team of Subnautica 2 developer Unknown Worlds successfully blocked Krafton’s request for a court-ordered protective order to force the founders to turn over their devices for a forensic inspection.
Now, in a judgment published earlier today, Vice Chancellor Will of the Delaware Chancery Court has entered a judgment in favor of Unknown World founders’ representatives, Fortis, claiming “Krafton breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.”
“To remedy these breaches, Fortis is entitled to specific performance. Edward Gill is hereby reinstated as CEO of Unknown Worlds, and his period of operational control […] will be extended by the time that elapsed between his wrongful termination and his restoration. The July 1, 2025, Board resolution is declared ineffective to the extent it infringes on Gill’s operational control right.”
The court now deems the firing of Unknown Worlds’ senior team as “ineffective to the extent it infringes on Gill’s operational control right,” and warned Krafton to return Gill’s “authority over the early access launch of Subnautica 2.” It must also “immediately restore his access to his Steam platform.”
“Frustrated by the Key Employees’ refusal to forfeit operation control and facing a nine-figure liability, Krafton went searching for a pretext,” the judge wrote.
“Krafton’s true focus in June 2025 was avoiding its financial exposure. It knew Subnautica 2 was poised to achieve a $250 million earnout, which [Krafton CEO] Kim viewed as a catastrophic failure. Krafton undertook ‘Project X’ to either force a deal on the earnout or execute a ‘takeover’ of the studio. Terminating the Founders was one tactic explored and ultimately chosen by Krafton to accomplish its goal.”
The judge also extended the period over which the team could secure that $250 million payment, giving them up until September 15, 2026, to meet the demands of their contract and collect the bonus. As for the claim that the founders were secretly downloading company data?
“Krafton discovered the data downloads after the July 1 terminations, placing it within the after-acquired evidence doctrine. But Krafton’s defense still fails. It has not proven that the data downloads constitute an independent basis for termination,” the judge opined.
In a statement to press, Krafton said: “Krafton puts players at the heart of every decision, and that will never change. Over the past several months, Krafton and the Unknown Worlds team have worked tirelessly to strengthen the game and prepare it for an Early Access release, with a continued focus on delivering the best possible experience for the Subnautica community. We look forward to pushing out the newly updated version as soon as possible for players.
“While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward. Today’s ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, Krafton’s immediate focus remains unchanged: delivering the best possible game to Subnautica’s fans.”
