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Update, July 17: Subnautica 2 publisher Krafton has provided GamesRadar+ with a statement about the situation, addressing the game's delay and saying it is "disappointed" that a lawsuit has been filed.
"Krafton's decisions were made to ensure Subnautica 2 is the best possible game and lives up to fan expectations," the statement reads. "Releasing the game prematurely with insufficient content would have both disappointed the players – who are at the heart of everything Krafton does – and damaged the reputations of both the Subnautica and Unknown Worlds brands."
Furthermore, it adds: "While we are disappointed that Charlie, Max, and Ted have filed a lawsuit seeking a huge payout, we look forward to defending ourselves in court. In the meantime, Krafton remains focused on what matters: delivering the best possible game as quickly as possible to Subnautica's fans."
Original story:
The dispute between the former leadership of Subnautica 2 developer Unknown Worlds and new owner and publisher Krafton has intensified with the public release of a 58-page lawsuit filed by the studio's three ousted leaders. The suit claims Krafton "flagrantly breached both the letter and the spirit of the promises at the very core of its agreement to purchase Unknown Worlds" in large part to deny a $250 million payout stipulated at the time of the $500 million acquisition.
A report from Kotaku, citing a copy of the suit provided by the legal team for former studio leads Charles Cleveland, Adam McGuire, and Edward Gill, reveals key arguments. The suit claims breach of contract and was filed on July 10 in Delaware Chancery Court, then publicly released today, July 16. The damages sought by the lawsuit would be "determined at trial."
A concluding paragraph in the lawsuit minces no words and acts as a useful summary of the allegations, saying Krafton "promised to leave creative and operational control in the hands of the Founders. Promise broken. It promised to consult with the Founders before taking any action that could harm the earnout. Promise broken. It promised not to take any action with the primary business purpose of frustrating the earnout. Promise broken. And it promised not to terminate the Founders without Cause. Promise broken."
Throughout 2025, but especially following the April release of internal projections that would see Unknown Worlds hit time-sensitive revenue milestones required for the studio to receive all or most of that $250 million payout, the lawsuit alleges Krafton worked to have Subnautica 2 delayed.
"Krafton engaged in a months-long campaign to delay Subnautica 2’s release," it reads. "It pulled key marketing materials, refused to follow through with crucial partnerships, and reneged on long-standing commitments to handle important pre-launch tasks."
One section of the lawsuit claims that, following an April trip to Korea to "finalize the marketing and advertising strategy for Subnautica 2’s launch," Krafton employees "reported to Gill that Krafton’s leadership was not focused on a successful launch, but instead on how it could convince Unknown Worlds to delay the game."
Bloomberg notes that the suit adds, "After Krafton’s leaders reviewed Gill’s projections and evaluated the anticipated revenue and earnout numbers, everything changed."
To clarify, the lawsuit is specifically claiming that employees of Krafton said Krafton was indeed looking to avoid paying the $250 million earnout.
This claim follows a partially leaked and now-confirmed internal milestone review that showed Krafton was unhappy with progress on the early access build of Subnautica 2 and pushed for more biomes and story content to be added in order to meet player expectations.
This leak followed a post from Cleveland claiming that Subnautica 2 is "ready for early access".
That leaked May milestone review was another turning point for internal tensions, the lawsuit says. Afterwards, Krafton purportedly escalated efforts to delay the launch by limiting resources, stalling emails, and, per Kotaku's report, "claiming control over the final release date decision."
In June, shortly before the now widely reported leadership ousting, the lawsuit claims Krafton offered the three studio heads the option of a lower payout while also claiming they had abandoned their responsibilities toward the studio – accusations which later spilled out publicly in a surprising statement that singled out Cleveland, Gill, and McGuire by name.
"On June 25, 2025, Krafton’s Head of Corporate Development told Gill that Krafton’s plan was to remove the Unknown Worlds board and fire the Founders," the suit reads. The suit claims this termination was "without cause," pointing back to the agreements made with Krafton.
In short, the lawsuit gives pretty clear words to the narrative that's been slowly developing between patchwork statements over the past few weeks.
Krafton has denied that the Subnautica 2 delay was motivated by money or the $250 million payout specifically, and has said it will push the deadline for the payout into 2026. Meanwhile, the ousted leaders have denied that there was just reason to fire them in part because the game was ready to go, and this lawsuit is couched squarely in that payout.
The lawsuit reiterates that wide playtesting for Subnautica 2 "drew high marks and confirmed the game was ready to meet those lofty expectations." Bloomberg sources at Unknown Worlds support the claims that Subnautica 2 is looking pretty good.
Subnautica 2 has, however, been delayed, with the survival game sequel now targeting a 2026 launch. That new launch date doesn't seem to be flexible, but the outcome of this lawsuit and internal strife is very much up in the air.
We've reached out to Krafton to request comment on the lawsuit.
A new statement posted to the Subnautica Reddit by Cleveland reads: "The saga continues. In my previous posts, I mentioned that there would be more to come. Well today, you can finally read the official complaint the original Unknown Worlds shareholders have filed against Krafton.
"It’s unfortunate we are here in this situation but we’re doing everything we can to make things right for everyone. Openness and transparency is my thing so we’re glad to bring this truth to light."
