The judge officially ordered the return of the original studio management Subnautica 2thus ending a tangled legal conflict that halted one of the most anticipated titles on Steam. The court ruled that publisher Krafton must immediately reinstate CEO Ted Gill to his position at Unknown Worlds. This legal victory for the developers comes after a nine-month battle during which the founders were fired and future Subnautica 2 thrown into uncertainty.
Clashes between the two companies began shortly after Krafton bought Unknown Worlds in 2021. The deal saw a massive performance-based bonus on the table that could have seen the development team earn up to $250 million if the studio met specific financial goals by the end of 2025. To achieve these numbers, the launch team planned Subnautica 2 in Early Access in late 2024 or early 2025, which is the window that likely triggered the payout. However, as the deadline approached, the relationship soured, leading to a sudden takeover of the company that removed the very people who created Subnautica franchise.
The Krafton Subnautica 2 Controversy Explained
Krafton has come under fire for terminating the leadership team at Unknown Worlds, the developers of Subnautica 2, before a $250 million payout.
The court annulled the “improper” termination of the founders
Vice Chancellor Lori W. Will of the Delaware Chancery Court found that Krafton breached its contract by firing Gill and co-founders Charlie Cleveland and Max McGuire without just cause. The judge called the publisher's actions a “wrongful usurpation of operational control” and declared the July 2025 board resolution that ousted the executives ineffective. The court has now ordered the publisher not to interfere with Gill's power over the project's schedule, budget or launch strategy.
The verdict was particularly scathing when it came to the motives behind the shooting. According to Bloomberg Law, the court found that Krafton's claims of “disconnecting” the founders were a pretext. Instead, the evidence suggested that the publisher engaged in “obstructive tactics” such as pulling marketing support and blocking key partnerships specifically to ensure the game missed its 2025 release date. The judge noted that the sequel was in fact “complete” and ready to debut as early as late 2024, but Krafton sought to “thwart” the milestones to avoid paying the $250 million dollars.
One of the more bizarre aspects of the case involved the alleged use of artificial intelligence to plan the takeover. Court documents suggested that Krafton CEO Changhan Kim actually consulted an artificial intelligence chatbot to devise ways to avoid paying a multimillion-dollar bonus. The lawsuit alleged that ChatGPT actually advised the CEO that it would be “difficult to de-earn.” Despite this advice, the publisher went ahead with the layoffs, citing “absence of senior management” as the official cause.
Internal reports revealed during the trial further supported the founders' claims. Exchanges among Krafton's top executives indicated they were concerned the payout would reduce the studio's long-term value. One report even suggested that it might be “easier to take over” the studio than to renegotiate a lower bonus. Krafton denied the allegations and insisted that the delay Subnautica 2 it was all about improving the quality of the game and making sure it lived up to fan expectations.
In an unusual move, the judge ruled that simply paying the founders lost wages would not be enough. According to Bloomberg Law, the court ruled that the original team's “unique creative vision” was essential to the game's reputation and the studio's survival. As a result, several legal orders were issued to resolve the dispute. Ted Gill is reappointed CEO of Unknown Worlds and now has full operational authority over the product roadmap, budget and launch planning for the sequel. Krafton must immediately restore Gill's administrative access to the Steam platform in order to manage the title's presence on the store. Because Krafton's intervention made it impossible to meet the original 2025 deadline, the judge extended the eligibility period for the $250 million payout to mid-September 2026. In addition, the co-founders retain the contractual right to request another extension of that payout period until March 15, 2027, if necessary.
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Although a specific release date has not been set, Subnautica 2 it is now expected to move to an Early Access launch on PC and Xbox Series X/S later this year. With the original leads back at the helm, fans seem to expect the sequel to stay true to the vision that made the first game such a hit. Unknown Worlds also confirmed that the game will not feature generative AI, a notable stance given Krafton's recent designation as an “AI-first company”.
According to Bloomberg, a Krafton spokesperson said that while they “respectfully disagree” with the ruling, they are evaluating their options for moving forward. Meanwhile, the founders called the decision a “complete vindication” of their team's hard work. The currently legally prohibited interventions from Krafton mean that the developers can finally finish the game on their own terms.
Source: Delaware Chancery Court
