Subnautica 2 is back in the spotlight for all the wrong reasons. On July 10, a lawsuit filed by three former Unknown Worlds executives against publisher Krafton released, triggering renewed scrutiny around the game’s delay. The legal filings allege internal conflict that may have played a key role in the project’s stalled development.
This follows our earlier reporting on Subnautica 2’s delay to 2026 and the removal of three top executives from Unknown Worlds. Krafton cited leadership absences and development pacing as reasons for the change, though reports at the time pointed to a $250 million earnout bonus that depended on meeting a 2025 release window. You can read that full story here.
Now, newly surfaced lawsuits filed by former leadership, including studio co-founder Charlie Cleveland, allege the publisher deliberately stalled the game’s release to avoid paying a $250 million performance-based earnout tied to 2025 financial goals. The 58-page legal document, covered by The Verge, accuses Krafton of allegedly cutting localization, canceling marketing plans, and scaling back content to delay the early access rollout. The developers say they were allegedly removed after pushing back against these changes and advocating for their team’s bonus.
A separate report by Rock Paper Shotgun cites a conversation in which Krafton CEO Changhan Kim allegedly told Cleveland that paying the bonus would be “embarrassing.” The article also outlines claims that critical content: including biomes, story elements, and creatures, was removed to meet a constrained early access deadline. Krafton would push back against these allegations stating, “Kim’s words had been incorrectly interpreted by the translators”.
Krafton has also denied the lawsuit’s framing, stating that it has extended the performance period into 2026 and that the changes in leadership were allegedly made due to abandonment of duties. Krafton installed CEO Steve Papoutsis to oversee the project and emphasized its continued commitment to Subnautica 2’s development. Steve Papoutsis commented on the situation, in an interview with GamesRadar. He dismissed claims that the delay was financially motivated, stating that Krafton has “done nothing but encourage the team to make the best game possible.” Papoutsis clarified that he isn’t stepping in to shift the game’s creative vision, adding, “I’m not coming into this situation where they need creative leadership.”
The drama surrounding the project hasn’t done the team or studio any favors and there are plenty of negative articles, community backlash, and people review bombing the original Subnautica in protest. Despite this, leadership changes, and legal battles, Subnautica 2 remains highly anticipated by fans. Krafton has publicly stated that they will vigorously defend themselves against the lawsuit in court. While the game’s release date has been pushed to 2026, the studio maintains that development continues and Early Access will arrive when the product is ready. The situation remains ongoing, with all eyes on how Krafton and Unknown Worlds will navigate the challenges ahead.