Krafton Pushes Back Against Former Subnautica 2 Leaders in Legal Battle

Krafton has officially responded to the high-profile lawsuit filed by three former executives of Unknown Worlds, the studio behind Subnautica 2. The dispute stems from Krafton’s 2021 acquisition of the developer for $500 million, plus a potential $250 million earn-out bonus tied to post-release sales milestones for Subnautica 2. The majority of that bonus—about 90%—would have gone directly to the ousted leadership team.

The conflict escalated in July, just before Subnautica 2 was scheduled for early access. Krafton abruptly removed the trio from their positions, citing “abandonment of responsibilities,” and appointed Steve Papoutsis as CEO. The game’s launch was then postponed to 2026, with the publisher pointing to a lack of substantial content as the main reason for the delay. In response, the former leaders filed a lawsuit claiming breach of contract, seeking both reinstatement and the full $250 million payout, alleging Krafton had sabotaged the project to avoid paying the bonus.

Krafton’s counter comes in the form of a detailed, 100-plus-page court filing addressing all 186 claims from the plaintiffs. The company asserts that Charlie Cleveland and Max McGuire, who each earned $200 million from the initial sale, shifted focus away from Subnautica 2 toward personal endeavors. Meanwhile, Ted Gill—who received $60 million—allegedly pushed for a rushed release purely to trigger the bonus payment. Krafton cites the executives’ own public statements to support these allegations.

The publisher also maintains that by early 2025, its internal assessments deemed the game far from ready, with only around 12% of the originally planned content in place—matching details from a recent leak. Krafton argues that launching in this state could have severely damaged the Subnautica brand, drawing comparisons to the poor reception of Kerbal Space Program 2. The response also accuses the trio of improperly downloading large amounts of confidential material, in breach of the acquisition agreement, possibly to facilitate self-publishing.

With Krafton’s rebuttal now on record, the legal battle over Subnautica 2’s troubled development and lucrative bonus payments is set to intensify, leaving fans and industry watchers eager to see how the case unfolds.