The legal battle between Krafton and the co-founders of Subnautica developer Unknown Worlds seems to have reached at least one major conclusion. A judge has ordered Subnautica 2's publisher, Krafton, to reinstate Unknown Worlds' CEO Ted Gill and give him full control over Early Access release plans.
Initial reporting on this decision comes from Kotaku, who say that the judge's decision comes about nine months after leadership at Unknown Worlds was suddenly fired by Krafton. The judge says that Krafton cannot hinder or impede Gill's "authority over the early access launch of Subnautica 2" and that Krafton must restore Gill's access to "the Steam platform."
"Judgment is entered in favor of Fortis [which represents the Unknown Worlds founders] on its Phase One claims," wrote Vice Chancellor Lori W. Will for the decision handed down in the Delaware Chancery Court on March 16. "Krafton breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds."
When Unknown Worlds was acquired by Krafton in 2021, they were purchased for $500 million with an additional $250 million for the co-founders could meet certain sales goals by the end of 2025. That sales goal was $69.8 million in revenue as a baseline. For every additional dollar above that amount earned in revenue, Krafton would pay $3.12 up to a cap of $250 million.
Krafton had claimed that the Unknown Worlds' co-founders were fired for failing to get Subnautica 2 ready for a "timely launch." Krafton then claims that the co-founders of Unknown Worlds were working on other projects and claimed that they had tried to steal unauthorized materials prior to being fired.
The court rejected both of these claims by Krafton. Both Cleveland and McGuire "had taken on limited roles, but that was long known to and accepted by Krafton." As far as the alleged theft of unauthorized materials claim goes, the ruling says that "the former employees were acting to protect the studio's work product amid Krafton's takeover attempt." The data downloaded by these co-founders was kept confidential and was promptly returned.
A milestone review of Subnautica 2 in May 2025 seemed to worry Krafton CEO Changhan Kim. Kim apparently started to look for ways to avoid paying out the bonus to Unknown Worlds' co-founders and looked for reasons to fire the co-founders.
Their models predicted that a successful August 2025 early access launch of Subnautica 2, with “over 1.67 million copies sold by Q4 2025,” would generate significant revenue and “trigger [the] earnout.” A “Financial Planning Base” case scenario indicated a $191.8 million total earnout payment, and a best-case scenario indicated a $242.2 million payment. These figures immediately captured the attention of CEO Kim. Kim, who had personally led the acquisition of Unknown Worlds, felt that Krafton had overpaid. He feared that making an earnout payment would earn him a reputation as a “pushover.”
Krafton issued a statement to Kotaku following this ruling.
Krafton puts players at the heart of every decision, and that will never change. 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.
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.
