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The Verge
16-07-2025
- Business
- The Verge
Subnautica 2's creators sue their publisher for ‘severely' damaging the game's release
The battle between Subnautica 2 publisher Krafton and the three former executives at its developer Unknown Worlds continues. Ted Gill, Charlie Cleveland, and Max McGuire — the three executives who Krafton terminated earlier this year — have filed a lawsuit detailing the alleged attempts by Krafton to torpedo the early access release of Subnautica 2 with the express purpose of avoiding paying a promised earnout bonus of $250 million. 'Krafton's actions have already severely damaged fan anticipation and undermined the potential release of Subnautica 2,' the lawsuit says. That earnout was promised by Krafton to the former executives and roughly 100 developers and was to be paid should Unknown Worlds hit revenue goals by the end of 2025. Subnautica 2, slated for early access release sometime in late 2025, would have all but assured those goals were met. According to the lawsuit filed today in a Delaware chancery court, Krafton also knew Subnautica 2 was on track to meet if not exceed the revenue target to trigger the payout and began to take steps to essentially prevent that. The original Subnautica, an underwater survival adventure game, was a critical and commercial success, and its sequel has become the second most wishlisted game ever on Steam. The lawsuit details a meeting between Krafton's US and Korean employees concerning the marketing strategy for Subnautica 2. After that meeting, Krafton's US employees, who worked closely with the Subnautica 2 team, reported that Kafton's attitude about the game had changed. 'Upon their return, the El Segundo team—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.' The lawsuit additionally states that Krafton's US employees explicitly revealed to the Unknown Worlds founders that 'Krafton's legal team was combing through the agreements looking for any opening to terminate the Founders if they proceeded with the planned release.' The lawsuit provided the details of the deal in which Krafton purchased Unknown Worlds back in 2021. The lawsuit says that part of that deal was an agreement that the founders would maintain control of the company and the release schedule of Subnautica 2, while Krafton could not impede the game's development nor fire Unknown Worlds' founders without cause. According to the lawsuit, Krafton launched a campaign to do both. Krafton allegedly failed to follow through on several of its development responsibilities for Subnautica 2 including pulling marketing and localization support. 'Indeed, one of Krafton's El Segundo publishing employees reported to Gill that Krafton Headquarters told all Krafton teams to stop all creative tasks related to Subnautica 2.' The lawsuit claims that Krafton took these obstructionist actions to delay the game to explicitly avoid the $250 million payout. At a meeting between Krafton CEO Changhan Kim and Charlie Cleveland, Kim allegedly stated that, 'if Unknown Worlds released the game on its planned timeline [...], it could be disastrous financially and hugely embarrassing for Krafton.' Krafton declined to comment. After the initial story broke regarding the alleged reason for Subnautica's delay, Bloomberg reported that Krafton agreed to extend the timeline for the earnout to account for Subnautica 2's later release. Previously, the company denied that it delayed Subnautica 2 for any other reason but to polish the game. Earlier this week, an internal document regarding Subnautica 2's development were leaked on Reddit. The document, consisting of two pictures taken of a computer screen, outlined the content originally planned for the game's early access launch and how some material had to be changed or removed to meet the release acknowledged the veracity of those documents saying, 'Given these circumstances, Krafton has determined that transparent communication is necessary and has chosen to confirm the authenticity of the document,' possibly to bolster its argument that Subnautica 2 was not ready for its early access release.
Mint
16-07-2025
- Business
- Mint
Krafton Extends ‘Subnautica 2' Bonus Period, Is Sued by Founders
(Bloomberg) -- South Korean video game publisher Krafton Inc. plans to extend the schedule for a potential bonus payout at its subsidiary Unknown Worlds after delaying the highly anticipated survival game Subnautica 2 until next year. About 40 employees at Unknown Worlds were eligible to share a $25 million bonus, contingent upon the studio hitting certain revenue targets by the end of 2025, with a possible short-term extension. When Krafton said earlier this month that it planned to push back the game's release, employees feared that it wouldn't be possible to hit those targets and that their potential earnings would disappear. Now, that schedule has been extended an additional year, according to people familiar with the events at the studio and documentation seen by Bloomberg. Krafton also said it would advance a portion of the studio's projected 2026 profit-sharing bonus pool, which is independent from the bonus, to all Unknown Worlds employees this year. The issues around Subnautica 2 are at the center of a battle between Krafton and the former leadership team of Unknown Worlds — Chief Executive Officer Ted Gill and founders Charlie Cleveland and Max McGuire — who were fired in early July. Krafton purchased Unknown Worlds in 2021 for $500 million with an additional $250 million to be paid in 2026, depending on the company's performance under an earnout agreement. Of that, 10% was earmarked for staff who were there at the time, according to paperwork seen by Bloomberg. The roughly 40 employees each received checks of varying amounts at the closing and in the two years that followed, totaling $50 million, and were due to receive upwards of $25 million if the company hit those revenue targets. Each employee was told they would get a different sum, with most in the six or seven figures. Gill and the leadership group, who were due to receive the bulk of the remaining $225 million, had also said that they would distribute an unspecified amount to employees who weren't eligible for the earnout, although that isn't specified in the paperwork. On July 10, the former leadership group filed a breach of contract complaint against Krafton in Delaware Chancery Court. As of Tuesday, the complaint remained sealed. One main point of contention between the two parties is whether Subnautica 2, the sequel to a surprise 2018 hit, was ready for an early access release this year. The leadership group and Unknown Worlds developers who spoke to Bloomberg said the game was in good shape for early access, a model in which games are sold while in active development so that fans can offer feedback during the process. But since last week, Krafton has sent several statements suggesting that the game wasn't ready and that the studio's co-founders had neglected their duties, which 'resulted in repeated confusion in direction and significant delays in the overall project schedule,' according to the company. More stories like this are available on
Korea Herald
13-07-2025
- Business
- Korea Herald
Krafton blames ousted founders for Subnautica 2 delay
Korea's leading game publisher Krafton pinned the blame for delays in the early access launch of Subnautica 2 on the founders of US subsidiary Unknown Worlds Entertainment, as a legal dispute simmers with the studio's dismissed executives. In a statement Friday, Krafton called its decision to replace the leadership at California-based Unknown Worlds a 'difficult but necessary step' to ensure the quality of the highly anticipated sequel. 'We allocated approximately 90 percent of the up to $250 million earn-out compensation to the three former executives, with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2,' the company said. 'However, regrettably, the former leadership abandoned the responsibilities entrusted to them.' The three founders — Ted Gill, Charlie Cleveland and Max McGuire — were recently dismissed after remaining in their roles for about four years following Krafton's 2021 acquisition of the studio for $500 million, not including the earn-out clause. Krafton has since appointed Steve Papoutsis, former CEO of Striking Distance Studios, as the new head of Unknown Worlds. Krafton also announced Friday that Subnautica 2's early access launch has been pushed back to 2026, following earlier targets of 2024 and then 2025. The company cited a lack of sufficient content in the prerelease. In a statement on X the same day, Cleveland said the founders have filed a lawsuit against Krafton, insisting they remain committed to releasing an early access version of the game. 'Subnautica has been my life's work and I would never willingly abandon it or the amazing team that has poured their hearts into it,' Cleveland wrote. Subnautica 2 has been seen as a crucial release for Unknown Worlds, whose earlier entries in the franchise have sold about 18 million copies, according to securities firms. Delays to the sequel are viewed as a key factor behind the studio's declining performance. Unknown Worlds reported operating profit of 28.1 billion won in the first half of 2021, prior to its acquisition. Annual operating profit has since steadily fallen to 19.8 billion won, 16.9 billion won and 13.4 billion won over the past three years. While details of the lawsuit have not been disclosed, Krafton said it remains committed to supporting the studio and honoring promised compensation. 'We believe that the dedication and effort of this team are at the very heart of Subnautica's ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised,' Krafton said.
The Verge
10-07-2025
- Entertainment
- The Verge
Krafton slams ex-Subnautica 2 execs and claims it'll give developers their ‘promised' reward
Subnautica 2 has been at the center of a contentious debate between leadership at its developer Unknown Worlds and the game's publisher, Krafton Games. At stake is a $250 million payout, promised to Unknown Worlds if the studio hit certain revenue targets by the end of this year. But a company shakeup and the subsequent delay of Subnautica 2 has rocked the studio and potentially imperiled the promised payout. On July 2nd, Krafton announced that Steve Papoutsis, CEO of The Callisto Protocol developer Striking Distance Studios would be taking over as the CEO of Unknown Worlds, replacing the current leadership of Ted Gill, Charlie Cleveland, and Max McGuire with immediate effect. The following week, on July 9th, Unknown Worlds announced that early access for Subnautica 2 would be delayed to 2026. According to the announcement, Subnautica 2 was in good shape, but closed testing revealed 'some insight that there are a few areas where we needed to improve before launching the first version of Subnautica 2 to the world.' That same day, Bloomberg's Jason Schreier reported that this delay was against the wishes of Unknown Worlds' former leadership and that there were serious financial implications for this delay. According to Schreier's report, when Krafton purchased Unknown Worlds, in 2021 it promised a $250 million bonus to the studio if it hit revenue targets by the end of 2025. Schreier's reporting also indicated that the bonus was planned to be shared among the studio's roughly 100 employees with some being promised bonuses in the seven figures. With Subnautica 2's delay, those revenue targets will likely not be hit, and those bonuses not paid out. In a statement to Bloomberg, Krafton said the delay was only to improve Subnautica 2's quality, and it's possible to envision a situation where Krafton delayed the game in order to get out of paying out the bonus. However, Krafton has issued a new statement that seemingly throws cold water over this interpretation. The statement says that Krafton had 'allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives' with the 'expectation' that the executives would 'demonstrate leadership and active involvement in the development of Subnautica 2.' The statement then accuses the ousted leadership of essentially abandoning development on the game while affirming 'fair and equitable compensation for all remaining Unknown Worlds employees.' Here's the statement in full, which you can also see on Krafton's website. To Our 12 Million Fellow Subnauts, — Inevitable Leadership Change Driven by Project Abandonment–Despite Holding 90% of Earnout for Themselves First and foremost, we sincerely thank you for your continued support, passion, and unwavering dedication to Subnautica. We wish to provide clarity on the recent leadership changes at Unknown Worlds, a creative studio under KRAFTON. Background of Leadership Change KRAFTON deeply values Subnautica's unique creativity and immersive world-building. To provide fans with even better gaming experiences, we acquired Unknown Worlds, fully committed to supporting Subnautica's future success. We collaborated closely with the studio's leadership, who were central to the creation of the original Subnautica, to foster the optimal environment for a successful Subnautica 2. Specifically, in addition to the initial $500 million purchase price, we allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives, with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2. However, regrettably, the former leadership abandoned the responsibilities entrusted to them. Subnautica 2 was originally planned for an Early Access launch in early 2024, but the timeline has since been significantly delayed. KRAFTON made multiple requests to Charlie and Max to resume their roles as Game Director and Technical Director, respectively, but both declined to do so. In particular, following the failure of Moonbreaker, KRAFTON asked Charlie to devote himself to the development of Subnautica 2. However, instead of participating in the game development, he chose to focus on a personal film project. KRAFTON believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project current Early Access version also falls short in terms of content are deeply disappointed by the former leadership's conduct, and above all, we feel a profound sense of betrayal by their failure to honor the trust placed in them by our fans. KRAFTON's Full Support for the Dedicated Development Team To uphold our commitment to provide you with the best possible gaming experience, we made the difficult yet necessary decision to change the executive leadership. Subnautica 2 has been and continues to be actively developed by a dedicated core team who share genuine passion, accountability, and commitment to the game. We deeply respect their expertise and creativity and will continue to provide full and unwavering support, enabling them to focus solely on delivering the exceptional game you deserve. KRAFTON's Commitment to its Promises in Rewarding Employees Additionally, KRAFTON has committed to fair and equitable compensation for all remaining Unknown Worlds employees who have continuously and tirelessly contributed to Subnautica 2's development. We believe that the dedication and effort of this team are at the very heart of Subnautica's ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised. Fans will always remain at the center of every decision we make at KRAFTON. Moving forward, we promise transparent communication and continued efforts to sustainably develop and expand the beloved Subnautica universe. Honoring your trust and expectations is a core tenet at KRAFTON. We are committed to repaying your patience with an even more refined and exceptional gaming experience.
Engadget
10-07-2025
- Entertainment
- Engadget
Subnautica 2's early access release delayed to 2026 amid developer drama
Subnautica 2 is one of the most highly anticipated games around. It's the second-most wishlisted game on Steam behind (you guessed it) Hollow Knight: Silksong . However, you'll need to wait longer than anticipated to try Subnautica 2 in four-player co-op, as the survival game's early access release has been delayed until early 2026. Developer Unknown Worlds said that community members who took part in playtests provided positive feedback about the story, creatures, environment and general direction of the game. However, the studio said, they "also provided some insight that there are a few areas where we needed to improve before launching the first version of Subnautica 2 to the world. Our community is at the heart of how we develop, so we want to give ourselves a little extra time to respond to more of that feedback before releasing the game into early access. With that in mind, we've made the decision to delay Subnautica 2 's early access release to 2026." To view this content, you'll need to update your privacy settings. Please click here and view the "Content and social-media partners" setting to do so. The delay will afford Unknown Worlds a chance to add more biomes, tools, vehicle upgrades and creatures while expanding the story, the studio said. Players can expect more details in the coming months. But news of the delay comes amid behind-the-scenes drama at Unknown Worlds. Bloomberg reports that the studio had been in line for a $250 million bonus (which the leadership group planned to share with employees) from Krafton if it hit revenue goals by the end of this year. The delay reportedly means Unknown Worlds is very unlikely to hit those targets. As such, Bloomberg 's sources suggest that means the team of around 100 people may not be eligible for the payout. Last week, Krafton — which bought Unknown Worlds in 2021 — turfed out the studio's leadership team of CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire. The publisher brought in Steve Papoutsis, a former executive at The Callisto Protocol developer Striking Distance, as the new CEO of Unknown Worlds. "There is nothing more important than the gamer experience. Given the anticipation around Subnautica 2 , we owe our players nothing less than the best possible game, as soon as possible," Krafton CEO CH Kim said in a statement, "We are thrilled Steve is joining us in our shared commitment at Krafton and Unknown Worlds to deliver Subnautica 2 as a more complete and satisfying entry in the series — one that truly lives up to player expectations." Per Bloomberg , Papoutsis told employees this week that Krafton didn't believe Subnautica 2 was ready for an early access release and claimed he didn't know the specifics of the contract regarding the quarter-billion-dollar bonus. "It's never been told to me that we're making this change specifically to impact any earnout or anything like that," he reportedly told staff. According to Cleveland, however, Subnautica 2 is actually "ready for early access release." The studio's co-founder wrote in a lengthy X post on July 5 that "while we thought this was going to be our decision to make, at least for now, that decision is in Krafton's hands." A Krafton spokesperson told Eurogamer that the decision to delay Subnautica 2 was "based solely on our commitment to quality and to delivering the best possible experience for players" and it was not "influenced by any contractual or financial considerations." They added that "the decision had already been under discussion prior to recent leadership changes at the studio."
