Court tells Subnautica 2 publisher Krafton to reinstate fired CEO and let him handle its Early Access release
Krafton terminated the game leads’ contracts “without valid cause”, a judge has ruled
The former CEO of Subnautica 2 studio Unknown Worlds has to be given his job back, a court has ordered.
CEO Ted Gill, co-founder and creative director Charlie Cleveland, and co-founder and technical director Max McGuire were fired by Krafton last year, with the publisher accusing the trio of an “absence of core leadership” and claiming it felt “a profound sense of betrayal by their failure to honor the trust placed in them by our fans”.
The three claimed, however, that Krafton had betrayed them by firing them right before delaying Subnautica 2, a move they allege was designed to deliberately prevent its Early Access release, and avoid it selling well enough to trigger a $250 million bonus for the development team.
The trio took Krafton to court to demand that they be restored to their positions at the studio, and now a judge has declared that Gill “is hereby reinstated as CEO of Unknown Worlds”, as reported by Kotaku.
The judge found that Krafton had “breached the EPA by terminating the key employees without valid cause and by improperly seizing operational control of Unknown Worlds”.
As a result, the board decision on July 1 – at which Krafton fired the founders, took over control of Unknown Worlds and delayed Subnautica 2 – has been “declared ineffective to the extent it infringes on Gill’s operational control right”.
Krafton must “immediately restore [Gill’s] access to the Steam platform”, and is not allowed to “impede Gill’s authority over the early access launch of Subnautica 2”.
As for the $250 million sales bonus for the development team, the judge extended the eligibility period to September 15, and noted the co-founders have a “contractual right to further extend” this to March 15, 2027.
The lawsuit filed last year alleged: “Already concerned that Krafton had paid too much to acquire Unknown Worlds, [CEO CH] Kim feared that making any earnout payment to [the] founders would earn him a reputation as a pushover and endanger his position as CEO.”
It added: “Since Krafton could not convince the founders to delay the game, Kim searched for another way to ‘cancel the earn-out’.” This included potentially firing the founders so the bonus didn’t have to be paid.
However, the brief alleged that Krafton’s global head of corporate development Maria Park told Kim that “it seems to be highly likely that the earn-out will still be paid if the sales goal is achieved, regardless of the dismissal with cause”.
It also claimed Kim “turned to artificial intelligence to help him brainstorm ways to avoid paying the earnout” but that “ChatGPT likewise advised that it would be ‘difficult to cancel the earnout’”.
Krafton denied the claims made in the brief, continuing to insist that the founders weren’t focused on developing the game in time and that the delay was necessary to improve the game, rather than to avoid paying the $250 million earnout.
