We now have new details from the recently unsealed lawsuit filed vs. Krafton.
Krafton fired Unknown Worlds Entertainments management, Ted Gill, Charles Cleveland, and Max Mcguire, at the start of this July. After some back and forth online, the three sued Krafton for breach of contract.
Bloomberg reported that the lawsuit was over Krafton trying to delay the launch of Unknown Worlds’ game, Subnautica 2, so they can avoid playing a $ 250 million earnout bonus. Today, we have a clearer picture of what the lawsuit alleges.
As reported by Video Games Chronicle, Krafton really did conspire to remove the three heads of the studio. To quote part of the lawsuit:
In short, Krafton flagrantly breached both the letter and the spirit of the promises at the very core of its agreement to purchase Unknown Worlds.
It promised to leave creative and operational control in the hands of the Founders. Promise broken. It promised to consult with the Founders before taking any action that could harm the earnout. Promise broken.
It promised not to take any action with the primary business purpose of frustrating the earnout. Promise broken. And it promised not to terminate the Founders without Cause. Promise broken.
As we pointed out earlier, Krafton could simply choose to cancel or delay the game. While they would probably have to provide reasonable explanation to fit the terms of their contract, that would have been simpler than hatching such plans to remove the management along the way.
So this explanation does make more sense for what was alleged in the lawsuit. We aren’t certain that the $ 250 million earnout was really that much motivation for the publishers of the second most profitable life service game in the market. But this does now look more like it’s their legal argument to try to win in court.
The lawsuit also alleges that the trio even found out that Krafton’s legal team were looking for ways to fire them. Now, if Krafton simply lost faith in the game, they would not have had to go this far. Even if Unknown Worlds as a studio or their management disagreed, we have seen plenty of promising games this year that have been cancelled or discontinued, even after they made money or had huge potential.
It really is enough for a publisher to decide they don’t want to take a risk with a game, that does so much as not making enough back, to decide to delay or cancel it. So now the two parties will have to argue their case on who’s telling the truth, and the evidences that they should have to support these claims.
We do have to point out now, in the situation that Krafton loses this case, it’s highly unlikely that the three studio heads will get to return to finish Subnautica 2. They are more likely to get a huge settlement back, with Krafton still getting to decide to go forward, delay, or cancel the game. We certainly hope that Unknown Worlds still gets to make their game and release it in the middle of all of this.
