A judge has now ruled in favour of Unknown Worlds co-founders in the Subnautica 2 case, ordering Krafton to reinstate the CEO and extending the $250 million bonus earnout period.
Krafton and the Unknown Worlds co-founder have been in a legal battle over Subnautica 2 for quite some time now. Krafton had alleged that former leaders of the game had “abandoned” their responsibilities. At the same time, the co-founders claimed that Krafton wanted to delay the game to avoid the $250 million payout. Now, a ruling on the case has finally arrived.
Subnautica 2 Case Ruled in Favour of Unknown Worlds Co-Founders
First reported by Kotaku, a decision has been made in the lawsuit between Unknown Worlds co-founders and Krafton, and it is in favour of the former. The decision states that Krafton had “breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.” Hence, the decision to fire CEO Ted Gill and others has been “declared ineffective”, with the CEO’s position reinstated.
The judge has ordered Krafton not to interfere with the reinstated CEO’s “authority over the early access launch of Subnautica 2,” and his access to Steam will also be restored. Moreover, the time period for earning the $250 million bonus has been extended to September 15, 2026.
The ruling stated that Krafton’s “newly manufactured justifications for the terminations are pretextual”. It adds that Krafton was already aware and had accepted that Cleveland and McGuire would have limited roles. On the topic of data downloads, the employees had done so to “protect the studio’s work product amid Krafton’s takeover attempt. They kept the data confidential and promptly returned it.”
The judge has also stated that models had predicted that Subnautica 2’s successful early access launch in August 2025 would have led to the game selling ” over 1.67 million copies sold by Q4 2025,” would generate significant revenue, and “trigger [the] earnout.” According to a “Financial Planning Base” case scenario, a $191.8 million total earnout payment was predicted, whereas the “best-case scenario indicated a $242.2 million payment.
The statement reads that these figures “immediately captured the attention of CEO Kim,” who already felt that Krafton had overpaid during the acquisition and feared making an earnout payment would earn him a reputation as a “pushover.” The judge also found that the CEO had sought ways to avoid paying the bonus earnout and to fire the co-founders, while forming “Project X” and consulting ChatGPT for these decisions.
Krafton Responds to Subnautica 2 Ruling
Krafton has already provided a response to Kotaku, stating that they “respectfully disagree with it and are evaluating their ways forward. Interested readers can check out their full statement below:
“Krafton puts players at the heart of every decision, and that will never change. Over 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.
While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward. Today’s ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, Krafton’s immediate focus remains unchanged: delivering the best possible game to Subnautica’s fans.”
In other news, Subnautica and Subnautica: Below Zero received Nintendo Switch 2 ports last month. What are your thoughts on the judge’s ruling in the Krafton v Subnautica 2 co-founders case? Leave your thoughts down in the comments, and join the official Insider Gaming Discord server.
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