Krafton has done good by the people at Unknown Worlds Entertainment, at least for now.
After firing the three heads of the studio, CEO Ted Gill and founders Charlie Cleveland and Max Mcguire, Krafton went into a back and forth with the trio that has culminated in the three suing their former game publisher. Central to this firing and the subsequent lawsuit are Krafton’s accusations that Unknown Worlds Entertainment’s management “neglected their responsibilities” in developing Subnautica 2. But the hot issue surrounding this firing are some bonuses that were due to Unknown Worlds.
Jason Schreier has shared new details and an update regarding the money in a new report for Bloomberg. As he explained, when Krafton acquired Unknown Worlds in 2021, they paid the studio $ 500 million for the deal. The 40-something developers got extra pay from this deal, from the 10 %, or $ 50 million, that was set aside for them. They received payments in different amounts, presumably in proportion to the work they did for the company in terms of both their ranking and amount of work done.
That deal also included a clause for Krafton to pay Unknown Worlds an additional $ 250 million as part of an earnout agreement. What this means is if Subnautica 2 met certain revenue and profit goals, they will earn that $ 250 million. Of that amount, $ 225 million would be paid to Gill, Cleveland, and Macguire, and the remaining $ 25 million would be split in the rest of the studio. These would also be split between the 40 member staff in varying amounts. Schreier was told that these bonuses ran into the six or seven digits.
Gill, Cleveland and Mcguire allegedly intended to also share some of the $ 225 million the three would earn between them to some of their 40 employees, even if they didn’t earn bonuses from the earnout deal. Since this isn’t in the paperwork it may be a personal arrangement the three decided on.
But here and now, Krafton gets to decide what bonuses Unknown Worlds Entertainment can earn. As we learned from a leaked document, development on Subnautica 2 has fallen behind schedule so much that not only does Unknown Worlds have to delay Early Access, but Krafton has to reassess the project’s overall finances. This conflicts with earlier claims that the game was ready to go into Early Access.
Krafton decided to extend the schedule for the $ 25 million bonus earnouts. This means that while Subnautica 2 has been delayed, those bonuses have not been cancelled, but also delayed to when the game gets launched and starts earning revenue.
Furthermore, Krafton also decided to advance payments of a separate profit-sharing bonus pool. If Subnautica 2 released on Early Access this year on schedule, that bonus pool would have been given out in 2026. That bonus pool is probably supposed to be delayed as well, so it does mean something that Krafton chose to give them money, even if they’re missing deadlines and not making Krafton money.
Krafton may have recognized the situation puts additional pressure on Unknown Worlds Entertainment, and they wanted to keep the developers motivated. Regarding the case, Schreier confirmed that Gill, Cleveland and Mcguire filed a complaint for breach of contract in the Delaware Chancery court in July 10. As of this writing, the complaint remains sealed so we’ll have to wait and see if the court decides to dismiss or accept this complaint, and what happens next.
