Krafton Fires Back at Former Subnautica 2 Developers Threatening Legal Action

Krafton’s Clarification on Unsuccessful Subnautica 2 Negotiations, Founders’ Departure, and $250M Bonus Dispute

Attempts by Krafton and the three founders of Unknown Worlds—Charlie Cleveland, Max McGuire, and Ted Gill—to privately resolve their disputes over Subnautica 2’s development were unsuccessful. Details of their escalating disagreement and the founders’ subsequent departure are now becoming public, as revealed in a recent Bloomberg report. According to the report, the founders left due to disagreements over delaying Subnautica 2 to 2026, which resulted in the loss of a $250 million bonus for the trio. This bonus was promised by Krafton if specific sales targets were met by the end of 2025. While Krafton’s initial statement on the founders’ departures was courteous, expressing regret, their stance has since hardened. Seeking to clarify its position and avoid being seen as the “villain,” Krafton released a statement prominently featured on its website’s homepage. The company stated, “With the aim of providing fans with an even better gaming experience, we acquired Unknown Worlds with full commitment to Subnautica’s future success. We’ve worked closely with the studio leadership, crucial for creating the original Subnautica, to create an environment conducive to Subnautica 2’s success.”

Krafton’s Dispute with Former Subnautica 2 Leaders over Delayed Release and Alleged Lack of Commitment

Delving into financial details, Krafton acquired Unknown Worlds in October 2021 for an initial $500 million, with a potential earn-out of up to $250 million. This earn-out, set to be paid if certain targets were met by 2026, would allocate 90% to the executives. Krafton claims these substantial investments were made with the expectation that the founders would demonstrate leadership and actively engage in Subnautica 2’s development. Instead, Krafton stated, “we regret that these former leaders abandoned their responsibilities.” Krafton further claims that Subnautica 2’s early access launch was initially scheduled for early 2024 but faced significant delays. The company requested Charlie Cleveland and Max McGuire to reassume their roles as Game Director and Technical Director, respectively, but both declined. Krafton is particularly critical of Unknown Worlds’ principal founder, Charlie Cleveland, alleging that he lost interest in his duties to focus on personal projects after the failure of Moonbreaker. Despite Krafton’s request for Cleveland to dedicate himself entirely to Subnautica 2’s development, he allegedly preferred to concentrate on a personal film project instead. Krafton attributes the project’s repeated directional confusion and significant overall delays to a lack of central leadership.

Krafton’s Disappointment with Subnautica 2 Leaders Over Content Controversy and Bonus Payments Jeopardy

The Korean publisher explicitly stated its disappointment with the former leadership, claiming a “deep sense of betrayal for not honoring the trust our fans placed in them.” Krafton insists that Subnautica 2 currently “falls short of content expectations,” necessitating the postponement of its launch to 2026. This stance conflicts with the founders’ belief that the game is commercially ready for early access without further delays. Journalist Jason Schreier of Bloomberg reported that this viewpoint is shared by the development team. The subjective nature of determining a game’s readiness, particularly for early access, adds complexity to the dispute, given the significant financial implications. The Subnautica 2 delay also jeopardizes a portion of the earn-out designated for employees. Krafton’s contract stipulated that 10% of the $250 million bonus would be distributed among approximately 40 studio employees, with most receiving six-figure sums. The previous Unknown Worlds management had also promised employees their share of this agreement. These payments hinged on the studio meeting performance targets by 2026, which are now at risk.

Following Krafton’s public statements, Charlie Cleveland responded on X and later confirmed on Reddit that the Unknown Worlds founders have taken legal action against Krafton. Cleveland described the situation as “an explosive and surreal moment.”

Cleveland stated, “None of this is what we wanted, but we truly appreciate the incredible support we’ve received from everyone. It means a lot to us, especially now.” He reiterated the founders’ conviction that the game “is ready for Early Access” and that the developers want players to experience it, but it is “not under our control” due to the ongoing dispute. Cleveland directly addressed Krafton’s accusations, emphasizing, “Subnautica has been the work of my life, and I would never abandon it grudgingly, nor the incredible team that dedicated itself to it.” He also refuted the idea that he, Max McGuire, and Ted Gill intended to keep the earn-out entirely for themselves. “Historically, we’ve always shared our profits with the team and did so when we sold the studio,” Cleveland wrote, affirming their intention to continue sharing the earn-out bonus, as the team “deserve[s] it for all the amazing work they’ve put into getting this great game into your hands.” He concluded that while litigating Krafton was not desired, the situation “needs to be corrected.”

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