Krafton’s CEO CH Kim allegedly warned Subnautica 2‘s management about releasing the game too early.
A Quick Review Of Events
Last July, Krafton fired Unknown Worlds Entertainment’s management, namely CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire. The three would go on to sue Krafton, accusing them of plotting to oust them from the studio on purpose.
The two parties are fighting over development of Subnautica 2. The three claim that the game was ready to launch in Early Access when Krafton suddenly delayed. Krafton says otherwise, and accused the three of neglecting their duties.
The lawsuit centers around a $ 250 million earnout payment. The three say Krafton is denying this payment to the studio. Krafton promised to give out early bonuses prior to the lawsuit.
Paraphrasing Krafton’s Official Account
Krafton offered the $ 250 million earnout to Gill, Cleveland, and McQuire, after they already bought them out of the company and franchise. Under this deal, the three could stay in charge. Cleveland and McQuire would get to keep making Subnautica 2, but this was subject to certain conditions.
They would earn the $ 250 million earnout if they were successful in making not just Subnautica 2 but also other games. They also had a schedule of specific revenue targets in four consecutive quarters before June 2026.
So Krafton’s deal didn’t actually require the three to stay. Krafton expected them to keep doing their best in making Subnautica 2, but that’s not what the three did.
Krafton claims Cleveland and McGuire got $ 200 million each and immediately abandoned the work they were rehired for. Gill received $ 60 million and kept working. But Krafton claimed he was only working for the earnout payment instead of trying to make the game successful.
Krafton’s CEO Was Worried About A Poor Release
Early Access launch was originally scheduled for Q1 2024. The date then kept changing to 2025, long after they missed their revenue targets.
Krafton shared a particular story from Spring 2025:
Unknown Worlds received extensive feedback from Krafton’s internal publishing teams, which indicated that Subnautica 2 was not ready for release.
Krafton’s CEO warned the Key Employees that a premature Early Access release of a highly anticipated sequel like Subnautica could cause irreversible harm to the entire IP franchise – pointing to the sequel to Kerbal Space Program as a prime example.
But as the end of the earnout period drew nearer, the game was still nowhere near its planned scope.
Is Krafton On The Hook As Much As Unknown Worlds?
If Krafton’s CEO CH Kim directly intervened, this could have been a grave financial matter for them. We talk a lot about PUBG making Krafton one of the most successful game companies today. But it sounds like the massive investment at Unknown Worlds could hurt them. If their games failed, this could mean layoffs at not just Unknown Worlds, but also Krafton itself.
And that paints a complete picture for why this Korean gaming giant is taking their onetime business partners to court. These names may not seem as important to us as Todd Howard, Electronic Arts, or Red Dead Redemption 2. But it’s a situation where millions of dollars and hundreds of livelihoods are on the line.
