Some stunning new developments have occurred in the story surrounding Krafton, their studio Unknown Worlds Entertainment, and its upcoming game, Subnautica 2.
At the start of this month, Krafton made the sudden announcement that Unknown Worlds Entertainment’s management, comprising of CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire, were laid off immediately, to be replaced by the head of Striking Distance Studios, Steve Papoutsis.
And then yesterday, Krafton responded to claims that Subnautica 2 was getting delayed just before Unknown Worlds was set to receive a $ 250 million payout, to avoid giving the money out. Krafton explained that the delays were because of playtester feedback and not due to management issues. They further clarified that the payouts were tied to revenue targets, but they will be giving some of the payout to Unknown World’s staff regardless.
And then, on a statement on their website, Krafton suddenly made some sweeping claims vs. Gill, Cleveland, and McGuire. We will share the full statement below, but they accused the three ‘abandoned the responsibilities given to them’ in relation to this game.
They specifically claimed that they attempted to convince Cleveland and Mcguire to renew work on Subnautica 2 as game director and technical director multiple times, but they declined to do so. They also accused Cleveland of stepping away from Subnautica 2 to work on a personal film project after Unknown Worlds’ last game, Moonbreaker, failed in the market.
Krafton also filled out some missing details from insider reports. As it turns out, 90 % of the $ 250 million payout was intended for Gill, Cleveland, and McGuire, and the rest of the studio was really only going to split up $ 25 million between them. That would amount to six figure bonuses to each staff, so they were not necessarily treated poorly. But this highlights how Krafton had to hold management accountable.
Krafton claims the actions of Unknown Worlds’ former management led to the game’s delays, and they promised ‘fair and equitable compensation’ for the current staff. They end their statement by promising more transparent communication moving forward.
In response, Gill, Cleveland, and McGuire have decided to sue Krafton, with more details forthcoming in the future. While Krafton has had generational success simply off the backs of PUBG, they have had far less success as a publisher for Western studios. Striking Distance Studios’ two games, The Callisto Protocol and [REDACTED], have both failed in the market, alongside Unknown Worlds’ Moonbreaker.
On paper, it should be laudable for such a successful publisher to ‘share the wealth’ by helping fund and publish games by other studios. But Krafton’s reputation has taken a hit from the allegations that either they or Striking Distance Studios’ management had failed to make the right decisions to make The Callisto Protocol successful. In this case, it sounds like we’re going to learn more about what went on behind the scenes between Krafton and Unknown Worlds Entertainment, which may shape their reputation and ability to publish games moving forward.
For the sake of posterity, we’ll share Krafton’s full statement below.
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 schedule.
The current Early Access version also falls short in terms of content volume.
We 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.
