Krafton has issued a formal response to the lawsuit filed by the former Unknown Worlds executives, countering the legal action by the three-person leadership team that was previously working on Subnautica 2. Krafton acquired Unknown Worlds in 2021 for a sum of $500 million, with an additional $250 million bonus earn-out to be paid if Unknown Worlds met certain sales milestones after releasing Subnautica 2, 90% of which would’ve gone to the three leaders.
On the eve of Subnautica 2’s scheduled early access release in July, Krafton fired all three Unknown Worlds executives, claiming “the former leadership abandoned the responsibilities entrusted to them,” installed Steve Papoutsis as CEO, and delayed Subnautica 2 to 2026, citing a lack of meaningful content as the root cause. In response, the former Unknown Worlds executives filed a lawsuit against Krafton for breach of contract, asking the court to reinstate them in their former positions and that the South Korean publisher be forced to pay the $250 million earn-out bonus. The trio stated that Krafton’s actions had sabotaged Subnautica 2’s release, making it impossible for them to meet the requirements for the bonus.
Krafton Responds to Subnautica 2 Co-Founders’ Lawsuit
Now, Krafton has formally responded to the Unknown Worlds lawsuit with a 100+ page document submitted to the court, answering every single complaint raised by the former Subnautica 2 devs in full. In it, the publisher claims that after pocketing $200 million each from the $500 million sale of Unknown Worlds, Charlie Cleveland and Max McGuire abandoned Subnautica 2‘s development, focusing instead on personal projects. Whereas Ted Gill, who got $60 million from the initial deal, aimed to release Subnautica 2 as quickly as possible in order to get his share of the bonus payout. The document cites social media statements from Cleveland and McGuire to back up its claims.
Further on, Krafton clarifies that by Q1 2025, internal publishing teams at the company had come to the conclusion that Subnautica 2 early access was in an unfinished state, and releasing it would irreparably harm the entire franchise, as well as potential sequels. The team also highlighted Kerbal Space Program 2’s terrible reception as an example of what could happen.
According to Krafton, the development lead for Subnautica 2 considered the planned early access version’s scope to be 12% of what was originally envisioned, a figure consistent with the recent Subnautica 2 leak. The publisher also claims that the three executives downloaded “massive amounts of confidential information” in violation of the EPA (Equity Purchase Agreement), likely in hopes of self-publishing the game.
The lawsuit brought forth by the ousted Unknown Worlds leadership raised 186 arguments as to why the South Korean publisher was in the wrong and that their termination should be considered unlawful and a deliberate attempt to avoid the payout. With Krafton’s lengthy response now public, it’ll be interesting to see if there’s any pushback or counterarguments made by the former Unknown Worlds leaders.
