Subnautica founders’ lawsuit accuses Krafton of ‘ripping the game from its creators in the name of money’

The former leadership of the hotly anticipated underwater survival sequel Subnautica 2 has accused publisher Krafton of obstructing its 2025 release plan, and firing them from the company, in order to avoid paying a $250 million earnout.

Earlier this month, Subnautica 2’s development took a dramatic twist when Krafton shared the surprising news that Unknown Worlds’ leadership had been fired from the company, including CEO Ted Gill, co-founder and creative director Charlie Cleveland, and co-founder and technical director Max McGuire.

Soon after, the former developers announced they were launching legal action against Krafton, which had accused them of “abandoning” Subnautica 2 development and ‘betraying’ fans’ trust.

A Bloomberg report alleged that Krafton had made the decision to fire the execs months before it was due to pay a $250 million bonus to the development team, which leadership had planned to share with the studio’s employees of around 100.

In a statement, Krafton denied that its decision to fire the trio was influenced by “any contractual or financial considerations”.

On Wednesday, details of the former executives’ lawsuit against Krafton were published. According to court docs seen by VGC, the trio claim breach of contract and accuse Krafton of delaying Subnautica 2’s release into 2026, despite the game being ready for 2025 early access release as planned.

“In short, Krafton flagrantly breached both the letter and the spirit of the promises at the very core of its agreement to purchase Unknown Worlds,” the docs read.

“It promised to leave creative and operational control in the hands of the Founders. Promise broken. It promised to consult with the Founders before taking any action that could harm the earnout. Promise broken. It promised not to take any action with the primary business purpose of frustrating the earnout. Promise broken. And it promised not to terminate the Founders without Cause. Promise broken.

“Why? Because Krafton knew that allowing the Founders to launch Subnautica 2 as planned would generate enormous commercial success and require Krafton to pay the $250 million earnout. By firing the Founders and delaying the launch, Krafton can capture (what’s left of) the game’s commercial success without paying the Unknown Worlds team a penny of the earnout.”

According to the lawsuit, the former Unknown Worlds leaders had first received word of Krafton’s desire to delay Subnautica 2 in April of this year. The trio were “shocked”, the lawsuit says, because the game was on track and had received high marks from the publisher’s own internal testers.

The lawsuit alleges that the trio were even informed that Krafton’s legal team was looking for means to fire them, should they proceed with the planned 2025 release.

“From mid-April forward, Krafton began building a new story: that Subnautica 2 was not ready and could not be released in 2025,” the lawsuit claims.

Soon after, it’s alleged that Krafton’s chief global publishing officer told Unknown Worlds CEO Ted Gill that if it was going to release Subnautica 2 with Krafton, “it had to be done his way or not at all”. The Krafton officer was allegedly “offended” when Gill reminded him that the publishing agreement preserved the release-date decision for Unknown Worlds alone.

“Shortly thereafter, Krafton demanded that Unknown Worlds delay the game until 2026, again claiming that Subnautica 2 was not ready,” the court docs continue. “Krafton’s obstructionist tactics intensified at a May 27, 2025 Milestone Review Meeting.

“At the meeting, Krafton announced that the game had to be delayed, based on the review of its internal experts. The Founders would later learn that the purported ‘experts’ had little expertise to share. None had worked on successful early access games, and none had experience with games in Subnautica 2’s genre (survival).”

The lawsuit continues: “For their part, the Founders explained at the Milestone Review Meeting why Krafton’s view was wrong and why they planned to proceed. They explained that playtest data (feedback from hundreds of community members who played the game for thousands of hours) unequivocally confirmed that the game was ready to go.”

It’s then alleged that Krafton took its “delay tactics” to another level, by pulling all support for the launch of Subnautica 2 in an “orchestrated effort aimed to delay the game and thereby harm the earnout”.

It’s claimed that Krafton pulled support for asset creation, localization, analytics, policy, legal, and “all creative tasks”. It’s alleged that due to Krafton’s actions, Unknown Worlds lost “several highly valuable promotional opportunities”.

According to the lawsuit, “multiple Krafton employees” suggested to Gill that the purpose of these actions was “to diminish the eamout”, and Krafton’s Head of Global Strategy and Operations told Gill that pulling these resources was a way for Krafton to avoid supporting the eamout.

“If this were not enough, Krafton then took aim at harming Unknown Worlds’ relationship with its fan community,” the docs continue. “It seized control of unknownworlds.com and subnautica.com and posted -without consulting the Founders or obtaining their approval – a statement apologizing for Subnautica taking ‘far longer than any of us ever intended’ and making allegations about Cleveland and McGuire’s alleged roles.”

In June, the lawsuit alleges that a period of failed negotiations ended with the leadership team being informed of their termination.

“In the name of its bottom line, Krafton has thrown its promises out the window and ripped the game from the hands of both its creators and its community,” the ousted trio alleges. “The community backlash to Krafton’s actions has been swift and decisive. And it demonstrates that Krafton made a miscalculation.

“Krafton apparently thought it could fire the Founders and delay the game without harming the franchise – thereby making money for itself, while avoiding any eamout obligations. But the community’s reaction shows that Krafton has already caused immeasurable damage to Subnautica 2.”

Last week, Krafton issued a statement claiming that the Subnautica 2 delay was “not influenced by any contractual or financial considerations”, but instead to improve the game.

Furthermore, Krafton’s new statement accused the former leadership team of abandoning their responsibilities in order to work on other projects, including a film, which it said led to delays for the game, and claimed that 90% of the $250 million payout was allocated to the three execs.

“Krafton believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule,” it said. “The current Early Access version also falls short in terms of content volume. We are deeply disappointed by the former leadership’s conduct, and above all, we feel a profound sense of betrayal by their failure to honor the trust placed in them by our fans.”