Back in early July 2025, everyone was caught off guard by the news that Krafton was dismissing the three heads of Unknown Worlds – Ted Gill, Charlie Cleveland, and Max McGuire – with immediate effect. These were the creative minds responsible for the highly acclaimed Subnautica, so everyone was confused since a long-awaited sequel was already on the way.
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At the time, the company only announced the sudden dismissals without detailing the exact public motive, and even stopped the Early Access for Subnautica 2, which was scheduled for 2025. This sparked a lawsuit between Krafton and the ousted co-founders of the studio, and this legal battle has just reached a major new chapter.
A Decisive Ruling for Unknown Worlds
After nearly a year, the Delaware Court of Chancery, which is handling the lawsuit, has determined that Ted Gill, the co-founder and former CEO of Unknown Worlds, should be reinstated as CEO of the company, granting him “full operational authority” over the studio.
According to information from Bloomberg, the judge handling the case also ruled that Gill must be “immediately restored access to the Steam platform” and that he is permitted to launch Subnautica 2 in Early Access whenever he chooses, meaning that Krafton does not have the power to stop him now.
The entire filing is available online and details the arguments made by both sides, especially those that were decisive for the case. Basically, the dispute revolves around a $250 million payout that Krafton would have to pay Unknown Worlds if the first Subnautica reached specific financial goals.
The judge handling the case also ruled that Gill must be “immediately restored access to the Steam platform” and that he is permitted to launch Subnautica 2 in Early Access whenever he chooses
For context, Krafton purchased the studio in 2021 for $500 million following the success of the first game, announcing the sequel shortly after. However, a clause in the contract indicated that the studio was eligible for a $250 million bonus based on revenue targets.
After hearing both sides, the judge reached the verdict that the game had indeed reached the targets to receive the bonus, but Krafton’s CEO, Changhan Kim, reportedly used an AI chatbot (well, that’s awkward) in an attempt to avoid paying it.
“As Unknown Worlds prepared to release its hotly anticipated sequel, Subnautica 2, the parties’ relationship fractured. Internal projections showed the new title generating significant revenue that would easily trigger the earnout. Fearing he had agreed to a ‘pushover’ contract, Krafton’s CEO consulted an artificial intelligence chatbot to contrive a corporate ‘takeover’ strategy,” reads the filing, without detailing exactly how the AI was utilized.
Additionally, the document shows how the judge found some missing pieces in Krafton’s allegations that the firings of Ted Gill, Charlie Cleveland, and Max McGuire were due to a “collective abandonment of responsibilities,” stating that the company used this merely as a pretext. “Frustrated by the Key Employees’ refusal to forfeit operational control and facing a nine-figure liability, Krafton went searching for a pretext,” the judge wrote.
Everything determined by the Delaware Court of Chancery has immediate effect, so it is possible that Subnautica 2 may finally emerge from the depths later this year, following the months after this case is closed. Krafton has not yet commented publicly on the matter, and the company is expected to attempt an appeal, given how aggressively it has fought this case so far.
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