{"id":479038,"date":"2026-03-16T18:58:07","date_gmt":"2026-03-16T18:58:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/479038\/"},"modified":"2026-03-16T18:58:07","modified_gmt":"2026-03-16T18:58:07","slug":"judge-orders-subnautica-2-studio-ceo-reinstated-amid-lawsuit","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/479038\/","title":{"rendered":"Judge Orders Subnautica 2 Studio CEO Reinstated Amid Lawsuit"},"content":{"rendered":"

A judge in the messy legal battle<\/a> between the cofounders of Subnautica developer Unknown Worlds and publisher Krafton has ordered the latter to reinstate CEO Ted Gill and give him control over Subnautica 2\u2018s Early Access release plans. The decision comes nearly nine months after sudden firings and conflicting claims put one of Steam\u2019s most wishlisted games in the middle of a complex lawsuit.<\/p>\n

\u201cJudgment is entered in favor of Fortis [which represents the Unknown Worlds founders] on its Phase One claims,\u201d wrote Vice Chancellor Lori W. Will for the decision handed down in the Delaware Chancery Court on March 16. \u201cKrafton breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.\u201d<\/p>\n

As a result, the \u201cJuly 1, 2025 Board resolution\u201d that saw Gill and others fired from the company is \u201cdeclared ineffective to the extent it infringes on Gill\u2019s operational control right.\u201d The judge has ordered Krafton not to impede the reinstated CEO\u2019s \u201cauthority over the early access launch of Subnautica 2\u201d and to restore his access \u201cto the Steam platform.\u201d<\/p>\n

Just as consequentially, the judge extended the period within which the team can earn a $250 million payout under the terms of Unknown Worlds\u2019 sale to Krafton. The cofounders, which includes Charlie Cleveland and Max McGuire, are now eligible to collect the bonus for performance of the studio up through September 15, 2026, and potentially even to extend the period beyond that date.<\/p>\n

\u201cPretextual\u201d justifications for firing Unknown Worlds\u2019 leadership <\/p>\n

The publisher had originally claimed Gill and the other cofounders were fired for failing to get Subnautica 2 ready for a timely launch. It later switched to arguing that the cofounders had unknowingly been working on other projects and tried to steal unauthorized materials prior to their firings. The court rejected both claims.<\/p>\n

\u201cKrafton\u2019s newly manufactured justifications for the terminations are pretextual,\u201d reads the court\u2019s decision. \u201cCleveland and McGuire had taken on limited roles, but that was long known to and accepted by Krafton. As for the data downloads, the former employees were acting to protect the studio\u2019s work product amid Krafton\u2019s takeover attempt. They kept the data confidential and promptly returned it.\u201d<\/p>\n

Krafton acquired Unknown Worlds in 2021 for a $500 million equity payout with up to $250 million in an additional earnout for the cofounders if certain sales goals were met by the end of 2025. \u201cThe earnout formula is highly leveraged. If Unknown Worlds surpasses a revenue threshold of $69.8 million, Krafton must pay $3.12 for each additional dollar of revenue generated, up to the $250 million cap,\u201d the decision reads.<\/p>\n

A CEO embarrassed by a bad deal <\/p>\n

It wasn\u2019t until a milestone review in May 2025 as Subnautica 2 headed toward Early Access on Steam that the publisher started to worry about those terms and came up with reasons to delay the launch and remove Gill and the others from the company. The judge writes,<\/p>\n

Their models predicted that a successful August 2025 early access launch of Subnautica 2, with \u201cover 1.67 million copies sold by Q4 2025,\u201d would generate significant revenue and \u201ctrigger [the] earnout.\u201d A \u201cFinancial Planning Base\u201d 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 \u201cpushover.\u201d<\/p>\n

According to the judge\u2019s findings, this is when Krafton CEO Changhan Kim began looking for ways<\/a> to avoid the earnout and settled on coming up with reasons to fire the cofounders for cause. This resulted in a month-long plan called \u201cProject X\u201d which included consulting ChatGPT multiple times for help with messaging the change in leadership to fans. The effort culminated in what the court has now ruled to be breach of contract.<\/p>\n

The legal fight continues <\/p>\n

What remains to be seen is just when exactly Subnautica 2 will now release and whether it will sell well enough to hit the earnout threshold. Litigation from the lawsuit pertaining to damages from the firings remains pending. The court will still have to decide as part of \u201cphase two\u201d what monetary damages if any have resulted from the entire chaotic affair.<\/p>\n

\u201cKrafton puts players at the heart of every decision, and that will never change,\u201d the publisher told\u00a0Kotaku in an emailed statement. \u201cOver 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.\u201d<\/p>\n

It continued, \u201cWhile we respectfully disagree with today\u2019s ruling, we are evaluating our options as we determine our path forward. Today\u2019s ruling does not resolve the former executives\u2019 claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, Krafton\u2019s immediate focus remains unchanged: delivering the best possible game to Subnautica\u2019s fans.\u201d<\/p>\n

Update 3\/16\/2026, 1:19 p.m. ET: Added more information from the court\u2019s ruling.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"A judge in the messy legal battle between the cofounders of Subnautica developer Unknown Worlds and publisher Krafton…\n","protected":false},"author":2,"featured_media":479039,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[59,5420,86,56,54,55],"class_list":["post-479038","post","type-post","status-publish","format-standard","has-post-thumbnail","category-technology","tag-gb","tag-subnautica-2","tag-technology","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/479038","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=479038"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/479038\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/479039"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=479038"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=479038"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=479038"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}