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Former Subnautica 2 Head’s Side Project Has Been Found – A Christmas Movie That’s Using Midjourney

July 14, 2025 by Ryan Parreno

This may seem to be a petty detail, but it may become relevant if this situation goes to the courts.

A minor detail about the current situation surrounding Subnautica 2 has been confirmed, and it’s kind of wild.

Alec Robbins, narrative director of Squanch Games, found that Unknown Worlds Entertainment’s co-founder Charles Cleveland is currently working on a Christmas movie. This information is out in the open, but it hasn’t really spread around quite yet.

The frontpage for Abyssal Films website says this:

Abyssal Films is a new film production company from the creator of Subnautica

Our goal is to make daring and immersive sci-fi films like Aliens and The Matrix. One day. But first I have a lot to learn. So I’m starting with three smaller movies – a Christmas comedy, a zombie movie with a twist and a movie we’re not ready to announce yet.

Just like with the games I’ve worked on, I want to share what we’re making as we’re making it.

Follow along as we make these films out in the open – and we show you (almost) everything we’re doing as we’re doing it.

There are also several blog updates that do resemble the daily updates for a crowdfunded production, such as Kickstarter or Indiegogo. While those sites also host movie and show projects, it is true that Hollywood generally doesn’t share public updates for their projects.

Their first project appears to be the aforementioned Christmas comedy, named Nutmeg and Mistletoe. They share this description of the film on its dedicated page:

Myself and a small team are making an independent Christmas comedy together. Think of it like a spiritual successor to Elf. It’s warm, funny and has tons of heart. We’re hoping to get a couple SNL vets to act in it as well.

Just like we did with Subnautica early access and Natural Selection 1/2 open development, we are talking about this film as we make it. We hope to bring everyone behind the scenes and show how the sausage is made (making this site a Notion page is a big step in that direction).

That’s why we’ve launched a podcast. The pod is called Movie in the Making and it is all about Nutmeg & Mistletoe right now (but we hope to use this process for all our future movies too).

They also shared an image for the project pitch for Nutmeg and Mistletoe, which they openly state was made in Midjourney. They even shared the prompt grid which you can see on the website.

The idea of a film production company that makes their entire production public is interesting, if not completely original. We also have to discuss their use of generative AI models, which they openly state, as it is a relevant public concern.

But the big issue surrounding Nutmeg and Mistletoe, and Abyssal Films in general, is that Krafton cited it in their statement against Cleveland, alongside Max McGuire and Ted Gill. They claimed last week that the three ‘abandoned their responsibilities’ in development of Subnautica 2.

Cleveland, McGuire, and Gill responded to Krafton’s statement by suing Krafton for breach of contract. If Krafton’s claims are true, Unknown Worlds Entertainment’s staff have Cleveland to blame for issues with the development and release of Subnautica 2. We don’t know to what degree they knew about their bosses’ side projects, but they certainly know what the situation is in the game studio.

As for now, some of Krafton’s claims have been confirmed. But the court of public opinion may come to a different conclusion than the actual courts this case could eventually be brought to.

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Category: UpdatesTag: Krafton, PC, PS5, Subnautica 2, Unknown Worlds Entertainment, Xbox Series X/S

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