Unknown Worlds, the studio behind the Subnautica franchise, has filed a lawsuit against three of its former leaders, accusing them of abandoning the company, misappropriating confidential data, and scheming to rush Subnautica 2 to market in order to secure a massive payout.
The suit, which was filed on August 15, targets studio co-founders Charlie Cleveland and Adam “Max” McGuire, along with former CEO Ted Gill, all of whom were fired on July 1, 2025. According to the complaint, the trio “largely abandoned” their duties as Subnautica 2’s creative and technical leads while simultaneously downloading tens of thousands of company files in the days before their termination.
The dispute traces back to Krafton’s 2021 acquisition of Unknown Worlds for $500 million, with an additional $250 million earnout tied to the successful development and release of Subnautica 2. Cleveland, McGuire, and Gill, described at the time as essential to the franchise’s future, stood to collect roughly 90% of that earnout.
Instead of staying engaged, Unknown Worlds claims Cleveland shifted to filmmaking, McGuire focused on his passion project Moonbreaker, and Gill allowed the studio to drift without oversight. Development of Subnautica 2 slipped years behind schedule, with Krafton reviews describing the 2025 builds as “unready” and lacking core gameplay.
By 2025, with the earnout deadline approaching, the lawsuit says that the three executives pressed Krafton to release Subnautica 2 in an unfinished state, despite internal and external feedback that the game could damage the franchise. When Krafton refused, they allegedly threatened to self-publish the game to capture revenue for the earnout window.
Unknown Worlds also accuses the trio of taking company secrets on their way out the door. Between the start of June and July 1, 2025, McGuire allegedly downloaded nearly 100,000 files, Cleveland about 72,000, and Gill exported his entire company email account. The studio says the three refused to return their devices or confirm what information they retained, and even threatened to delete all of the files entirely.
Unknown Worlds is seeking injunctions, the return of confidential data, and monetary damages for the delays, brand harm, and breach of duty it says the defendants caused. It also wants to prevent any further use or disclosure of its files.
Meanwhile, Cleveland, McGuire, and Gill—through Fortis Advisors, which represents former shareholders—have filed their own suit against Krafton, seeking to be reinstated and to force payment of the earnout. That case is headed for an expedited trial in November.
Fan reaction to the firings has largely sided with the company. On Reddit, one user summed up the prevailing mood: “This is defending the game, not the execs. Because those three were literally not involved in it in any way.”
In a lawsuit filed on August 15, Unknown Worlds is suing co-founders Charlie Cleveland and Max McGuire, along with former CEO Ted Gill for “abandoning” their roles at the studio after the acquisition by Krafton.
This lawsuit is in addition to the others involving Krafton and the former leadership. As of publishing, none of the accused parties (McGuire, Cleveland, or Gill) have publicly responded to the lawsuit.
Mike has been covering the gaming industry since 2012, and has reported on some of the largest events in the industry while also working as an investigative reporter. Outside of…
More from Mike Straw
Hope those three thieves/children rot in a cell tbh.
I’m on the dev side, always.
They didn’t deserve these scumbag snakes doing them dirty.
Gaming terrorists should be banned from the industry and jailed.
The other side to this is the rumour that the new owners did everything possible to hamper development so that the game would miss its release window, saving them $250M.
Given that only one side of this has been attacking the other constantly, while I’m with the developers and wish them the best, the new owners are NOT developers.
They have nothing to do with the game beyond buying the studio.
Don’t trust the word of a bunch of finance people or venture capitalists who just want the studio as an investment. They will do or say anything to maximise profits.
Youre commenting on an article which clearly states the only sabotage done has been committed by the 3 co-founders, not Krafton. The developers themselves are suing the cofounders, not Krafton.
I hate big publishers and companies as much as the next guy. Krafton is loosing a lot of potential cash by not releasing a huge IP this year that they orignally planned on. And also, Kraftons is actually pushing the deadline for the bonus allotted to the devs out to 2026 and moving up that years bonus to compensate. Seems to me they are actually doing right by the devs (or just farming public opinion from a slam dunk situation).
Again, I want to hate big publishers as much as you but that is not the situation happening right now.
Both lawsuits are public domain now, so you don’t need to assume sides on tribal alignment, better to read the lawsuits. The three OGs filed their lawsuit first, it was pretty much a bunch of whining. There’s plenty of evidence so we’ll see how the lawsuits pan out, but either way, just release the damn game.