Have you heard the major news behind the scenes at Krafton and Unknown Worlds Entertainment, the studio behind Subnautica and its upcoming sequel Subnautica 2? I don’t blame you if you haven’t, prolonged legal battles tend to drag so long they vanish from the public eye, but those cases do eventually end and it seems like after a rather arduous lawsuit Unknown Worlds is getting course-corrected.

The basic premise is: back in 2021 Krafton purchased Unknown Worlds Entertainment following the massively successful release of Subnautica in 2018. In 2025 Krafton proceeded to oust Charlie Cleveland and Max McGuire, the founders of Unknown Worlds, as well as Ted Gill the CEO. As reported by IGN, the triumvirate didn’t take to kindly to that, as they saw it as a way for Krafton to not pay the development team a $250 million bonus the team would receive if they met a quota by the end of 2025, a quota they probably wouldn’t meet without Subnautica 2, which Krafton delayed. Despite Cleveland, McGuire, and Gill’s claims to the contrary, Krafton claimed the delay was due to playtesting, as reported by IGN:

During playtests for Subnautica 2, we received valuable feedback from our community that reinforced our confidence in the game’s direction. At the same time, the feedback highlighted a few areas that could benefit from further refinement before release.

As community voices play a central role in how we shape our games, we’ve made the decision to give the development team more time to implement that feedback and deliver a more complete experience. As a result, Subnautica 2’s Early Access launch has been rescheduled for 2026.

This decision was based solely on our commitment to quality and to delivering the best possible experience for players. It was not influenced by any contractual or financial considerations. Additionally, the decision had already been under discussion prior to recent leadership changes at the studio.

Cleveland, McGuire, and Gill were subsequently blamed for this delay and fired as a result.

Naturally, they went to court over the dispute, and now we have our results. As reported by Kotaku, the lawsuit has been resolved and Ted Gill, former CEO of Unknown Worlds, has been reinstated. On top of that, the judge extended the period for Unknown Worlds to meet the aforementioned quota in relation to the $250 million bonus, which includes co-founders Charlie Cleveland and Max McGuire.

As the judge presiding over the case stated,

Their models predicted that a successful August 2025 early access launch of Subnautica 2, with “over 1.67 million copies sold by Q4 2025,” would generate significant revenue and “trigger [the] earnout.” A “Financial Planning Base” case scenario indicated a $191.8 million total earnout payment, and a best-case scenario indicated a $242.2 million payment. These figures immediately captured the attention of CEO Kim. Kim, who had personally led the acquisition of Unknown Worlds, felt that Krafton had overpaid. He feared that making an earnout payment would earn him a reputation as a “pushover.

Which explains the tactics used by Krafton to delay the game, oust the heads of Unknown Worlds, and possibly save both face and money in the long term.

So, Ted Gill is CEO again and Charlie Cleveland and Max McGuire are both eligible to make money off of their hard-earned work. There’s still the matter of Subnautica 2’s actual release, however, as well as the future of Unknown Worlds Entertainment: Ted Gill is CEO again, though he’s now very aware that the CEO of Krafton does not have his or his studio’s best interests in mind to say the least. It will be interesting to see how this ongoing story develops once Subnautica 2 eventually releases.