There are some additional layers to the drama that began a week ago when all three studio leads at Unknown Worlds were fired and replaced. At the time, Unknown Worlds' parent company Krafton laid off Ted Gill, Charlie Cleveland, and Max McGuire from Unknown Worlds. The three were replaced "effective immediately" with Striking Distance Studio CEO Steve Papoutsis.
Just yesterday on July 10th, Krafton issued a statement that said the three were fired because they "abandoned the responsibilities entrusted to them." This is in reference to the supposed development status of Subnautica 2, which is currently still in development at Unknown Worlds. Krafton's full statement can be read below because it only seems to pop up on their website once and is not shared in a typical fashion.
To Our 12 Million Fellow Subnauts,
— Inevitable Leadership Change Driven by Project Abandonment–Despite Holding 90% of Earnout for Themselves
First and foremost, we sincerely thank you for your continued support, passion, and unwavering dedication to Subnautica. We wish to provide clarity on the recent leadership changes at Unknown Worlds, a creative studio under KRAFTON.
Background of Leadership Change
KRAFTON deeply values Subnautica’s unique creativity and immersive world-building. To provide fans with even better gaming experiences, we acquired Unknown Worlds, fully committed to supporting Subnautica’s future success. We collaborated closely with the studio’s leadership, who were central to the creation of the original Subnautica, to foster the optimal environment for a successful Subnautica 2.
Specifically, in addition to the initial $500 million purchase price, we allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives, with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.
However, regrettably, the former leadership abandoned the responsibilities entrusted to them. Subnautica 2 was originally planned for an Early Access launch in early 2024, but the timeline has since been significantly delayed. KRAFTON made multiple requests to Charlie and Max to resume their roles as Game Director and Technical Director, respectively, but both declined to do so. In particular, following the failure of Moonbreaker, KRAFTON asked Charlie to devote himself to the development of Subnautica 2. However, instead of participating in the game development, he chose to focus on a personal film project.
KRAFTON believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule.
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.
KRAFTON’s Full Support for the Dedicated Development Team
To uphold our commitment to provide you with the best possible gaming experience, we made the difficult yet necessary decision to change the executive leadership. Subnautica 2 has been and continues to be actively developed by a dedicated core team who share genuine passion, accountability, and commitment to the game. We deeply respect their expertise and creativity and will continue to provide full and unwavering support, enabling them to focus solely on delivering the exceptional game you deserve.
KRAFTON’s Commitment to its Promises in Rewarding Employees
Additionally, KRAFTON has committed to fair and equitable compensation for all remaining Unknown Worlds employees who have continuously and tirelessly contributed to Subnautica 2’s development. We believe that the dedication and effort of this team are at the very heart of Subnautica’s ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised.
Fans will always remain at the center of every decision we make at KRAFTON. Moving forward, we promise transparent communication and continued efforts to sustainably develop and expand the beloved Subnautica universe.
Honoring your trust and expectations is a core tenet at KRAFTON. We are committed to repaying your patience with an even more refined and exceptional gaming experience.
— Inevitable Leadership Change Driven by Project Abandonment–Despite Holding 90% of Earnout for Themselves
First and foremost, we sincerely thank you for your continued support, passion, and unwavering dedication to Subnautica. We wish to provide clarity on the recent leadership changes at Unknown Worlds, a creative studio under KRAFTON.
Background of Leadership Change
KRAFTON deeply values Subnautica’s unique creativity and immersive world-building. To provide fans with even better gaming experiences, we acquired Unknown Worlds, fully committed to supporting Subnautica’s future success. We collaborated closely with the studio’s leadership, who were central to the creation of the original Subnautica, to foster the optimal environment for a successful Subnautica 2.
Specifically, in addition to the initial $500 million purchase price, we allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives, with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.
However, regrettably, the former leadership abandoned the responsibilities entrusted to them. Subnautica 2 was originally planned for an Early Access launch in early 2024, but the timeline has since been significantly delayed. KRAFTON made multiple requests to Charlie and Max to resume their roles as Game Director and Technical Director, respectively, but both declined to do so. In particular, following the failure of Moonbreaker, KRAFTON asked Charlie to devote himself to the development of Subnautica 2. However, instead of participating in the game development, he chose to focus on a personal film project.
KRAFTON believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule.
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.
KRAFTON’s Full Support for the Dedicated Development Team
To uphold our commitment to provide you with the best possible gaming experience, we made the difficult yet necessary decision to change the executive leadership. Subnautica 2 has been and continues to be actively developed by a dedicated core team who share genuine passion, accountability, and commitment to the game. We deeply respect their expertise and creativity and will continue to provide full and unwavering support, enabling them to focus solely on delivering the exceptional game you deserve.
KRAFTON’s Commitment to its Promises in Rewarding Employees
Additionally, KRAFTON has committed to fair and equitable compensation for all remaining Unknown Worlds employees who have continuously and tirelessly contributed to Subnautica 2’s development. We believe that the dedication and effort of this team are at the very heart of Subnautica’s ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised.
Fans will always remain at the center of every decision we make at KRAFTON. Moving forward, we promise transparent communication and continued efforts to sustainably develop and expand the beloved Subnautica universe.
Honoring your trust and expectations is a core tenet at KRAFTON. We are committed to repaying your patience with an even more refined and exceptional gaming experience.
Just yesterday, Charlie Cleveland provided a community update on the Subnautica subreddit. The former Unknown Worlds co-lead says that he and the other two ousted leaders are suing Krafton. Cleveland says in both this update and one made last week that they know that the game is ready for Early Access even if Krafton seems to disagree.
Hello everyone,
It continues to be an explosive and surreal time for the Subnautica team and community. None of this is what we wanted. But we truly appreciate the amazing support we’ve gotten from everyone. It means a lot to us, especially now.
As I wrote last week, we know in our souls that the game is ready for Early Access - that’s just how we roll. And we’d like nothing more than for you to play it (game devs live for this). But it’s not currently under our control.
We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public - you all deserve the full story. Suing a multi-billion dollar company in a painful, public and possibly protracted way was certainly not on my bucket list. But this needs to be made right. Subnautica has been my life’s work and I would never willingly abandon it or the amazing team that has poured their hearts into it.
As for the earnout, the idea that Max, Ted and I wanted to keep it all for ourselves is totally untrue. I’m in this industry because I love it, not for riches. Historically we’ve always shared our profits with the team and did the same when we sold the studio. You can be damned sure we’ll continue with the earnout/bonus as well. They deserve it for all their incredible work trying to get this great game into your hands.
Stay tuned.
-Charlie
It continues to be an explosive and surreal time for the Subnautica team and community. None of this is what we wanted. But we truly appreciate the amazing support we’ve gotten from everyone. It means a lot to us, especially now.
As I wrote last week, we know in our souls that the game is ready for Early Access - that’s just how we roll. And we’d like nothing more than for you to play it (game devs live for this). But it’s not currently under our control.
We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public - you all deserve the full story. Suing a multi-billion dollar company in a painful, public and possibly protracted way was certainly not on my bucket list. But this needs to be made right. Subnautica has been my life’s work and I would never willingly abandon it or the amazing team that has poured their hearts into it.
As for the earnout, the idea that Max, Ted and I wanted to keep it all for ourselves is totally untrue. I’m in this industry because I love it, not for riches. Historically we’ve always shared our profits with the team and did the same when we sold the studio. You can be damned sure we’ll continue with the earnout/bonus as well. They deserve it for all their incredible work trying to get this great game into your hands.
Stay tuned.
-Charlie
