Subnautica 2 Legal Battle Escalates: Unknown Worlds Founders Sue Krafton Over Firings and $250M Bonus
Subnautica 2 Legal Battle Escalates: Unknown Worlds Founders Sue Krafton Over Firings and $250M Bonus
A major legal battle has erupted in the gaming industry, centering on Subnautica 2 developer Unknown Worlds and its parent company, Krafton. The conflict, which became public earlier this month, involves the sudden firing of Unknown Worlds founders and CEO, the delay of the highly anticipated Subnautica 2 until 2026, and a subsequent lawsuit filed by the ousted leaders against Krafton. At the heart of the dispute is a substantial $250 million performance-based bonus payment.
The turmoil began on July 1, 2025, when Unknown Worlds co-founders Charlie Cleveland and Max McGuire, along with executive Ted Gill, were dismissed from the studio they established. Their removal coincided with Krafton’s implementation of a new review process for Subnautica 2, hinting at potential delays. Cleveland publicly expressed his disappointment on July 4, stating the game was ready for early access despite Krafton’s intentions to push back its launch.
On July 9, Krafton officially confirmed the delay of Subnautica 2’s early access to 2026. This move immediately raised questions regarding the studio’s ability to meet performance goals tied to the $250 million bonus, which was part of Krafton’s 2021 acquisition of Unknown Worlds. The following day, July 10, Krafton issued a statement accusing the fired leaders of abandoning the studio for personal projects, specifically citing Cleveland’s film production company, and claiming they sought the bonus “for themselves.”
In response, Cleveland and the other ousted studio heads filed a lawsuit against Krafton on July 10, which was unsealed on July 16, in Delaware Chancery Court. The lawsuit alleges that Krafton illegally fired them and intentionally delayed Subnautica 2 to avoid paying the lucrative bonus. It details a timeline of escalating tensions since April 2025, when Unknown Worlds presented positive revenue projections assuming a 2025 early access launch, which would have triggered the bonus payout. The plaintiffs claim Krafton then began to sabotage development and create a paper trail to justify their actions.
Adding another twist, Bloomberg reported on July 15 that Krafton now plans to extend the bonus payment window by an additional year and advance a portion of a separate profit-sharing pool to all Unknown Worlds employees. These actions appear to be an attempt to mitigate the claims made in the breach of contract lawsuit. The core of the conflict revolves around whether Subnautica 2 was genuinely ready for its 2025 early access launch and if Krafton’s actions were designed to circumvent the significant bonus payment. The lawsuit seeks for Krafton to pay out the full bonus as projected and reinstate the former Unknown Worlds leadership.
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