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 that Gill and the other cofounders were fired for failing to ship Subnautica 2 in a timely manner, and that they’d been wrongly working on other projects. The court rejected both of these claims.
According to the judge, Krafton’s CEO feared that Subnautica 2’s early access release would trigger the earnout payment owed to the founders, and decided to fire them for cause, which has now been ruled a breach of contract. According to court documents, Krafton CEO Changhan Kim consulted ChatGPT multiple times for help with how to message the leadership change to fans.
It’s not yet been decided what monetary damages, if any, will result from the ruling, nor is it clear if Subnautica 2’s release will be affected.
In a statement, Krafton said it disagreed with the ruling, and that Subnautica 2 would be released “as soon as possible”.
“Krafton puts players at the heart of every decision, and that will never change,” it said. “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.”
