Unknown Worlds former leadership team have shared their side of the story after accusing parent company Krafton of seizing control of the studio and pressuring employees to delay Subnautica 2 in a bid to avoid paying out a mammoth $250 million bonus tied to the success of the long-awaited sequel.
The latest details come via a lawsuit (shared on Scribd via Aftermath) filed against Krafton by Unknown Worlds co-founders Charlie Cleveland, Max McGuire, and Ted Gill—all of whom claim they were ousted from the studio by Krafton after trying to push through Subnautica 2’s proposed 2025 early access launch.
By contrast, Krafton claims Subnautica 2 currently “falls short in terms of content volume” and needs more time in the oven. It has also denied that it chose to delay the title to avoid paying the previously-agreed earnout, and alleges that Unknown Worlds’ leadership team were replaced because they essentially downed tools. Cleveland, in particular, was accused by the South Korean company of choosing to “focus on a personal film project” over developing Subnautica 2.
Those claims have been refuted by all three co-founders in a lawsuit that has been filed against Krafton around four years after it purchased Unknown Worlds for an initial $500 million.
In the redacted public version of the lawsuit, all three co-founders claim Krafton became “desperate” in its attempts to avoid paying the earnout and committed “flagrant contractual breaches in pursuit of that goal.” They say Subnautica 2 received “high marks” during extensive pre-release play testing—spanning thousands of hours—and was primed to launch in early access in 2025.
They note the title had 2.5 million wishlists on Steam, purportedly making it the “second most anticipated PC title in the entire world.” It’s a situation that most publishers might dream of—but one Cleveland, McGuire, and Gill claim made Krafton “go nuclear” in a bid to delay that success.
“The promise of such immediate and enormous success presented a problem for Krafton,” reads the suit. “Certainly, it eventually wants the game to drive revenue. But a blockbuster [redacted] launch—squarely within the earnout period—would likely trigger the $250 million earnout to the studio’s former owners and employees.”
“2025 is the ideal commercial release window for release”
As a result, they say Krafton CEO Changhan Kim told Unknown World leaders that an early access launch would be “disastrous financially and hugely embarrassing” for Krafton.
“So Krafton engaged in a months-long campaign to delay Subnautica 2’s release. It pulled key marketing materials, refused to follow through with crucial partnerships, and reneged on long-standing commitments to handle important pre-launch tasks,” continues the lawsuit.
“Multiple Krafton employees themselves suggested that these moves were for the purpose of frustrating the earnout, despite the earnout agreement’s prohibition on taking actions for that purpose. Even in the face of these pressure tactics, Unknown Worlds refused to delay the launch. The game was (and is) ready for early access; [redacted] 2025 is the ideal commercial release window for release.”
With Unknown Worlds seemingly pressing towards that 2025 early access release, Krafton is accused of terminating the contracts of Cleveland, McGuire, and Gill “without cause” and seizing control of the company. They state Krafton’s first decision after taking over the studio was to delay Subnautica 2 in “one extraordinary moment of corporate greed.”
Discussing some of the more specific allegations tabled by Krafton, the lawsuit claims Cleveland became focused on a movie project at the behest of the publisher, which is said to have encouraged him to move to Los Angeles to “network with Hollywood creatives” in support of a Subnautica movie. Cleveland states his title changed from ‘CEO and Design Director’ to ‘Franchise Creative Director’ to relieve him of the administrative tasks required of a chief exec so he could focus on Subnautica’s “cross-media expansion.”
All three founders assert they “maintained an active role with Subnautica 2—driving its overall creative and commercial direction and supervising the day-to-day leads.” It’s a statement that seeks to counter Krafton’s claims that all three “abandoned the responsibilities entrusted to them.”
The lengthy lawsuit ultimately posits that Krafton has “thrown its promises out of the window and ripped the game from the hands of both its creators and its community” in the name of its bottomline.
All three founders are seeking a judgement awarding the full payment of the earnout under the Equity Purchase Agreement and any other damages proven at trial.