A recent decision in a legal conflict involving the co-founders of Unknown Worlds, the studio behind the popular game *Subnautica*, and its publisher Krafton, has produced significant implications for the oversight of the company’s forthcoming project, *Subnautica 2*. The Delaware Chancery Court, led by Vice Chancellor Lori W. Will, has mandated that Krafton reinstate Ted Gill as CEO and allow him complete authority over the Early Access debut of *Subnautica 2*. This ruling comes after a chaotic period characterized by sudden dismissals of key staff and divergent accounts regarding leadership effectiveness.
In the judgment issued on March 16, the court asserted that Krafton’s decision to terminate Gill and other significant employees was not justified and represented a violation of an Employment Agreement. Consequently, the court ruled that the July 1, 2025, board resolution leading to Gill’s termination was ineffective regarding his operational rights. Additionally, Krafton was instructed to avoid interfering with Gill’s power over the game’s early access release and to reinstate his access to the Steam platform, which is essential for the distribution of the game.
Another crucial element of the ruling pertains to financial rewards. The court prolonged the timeline for possible performance bonuses as stipulated in Unknown Worlds’ agreement with Krafton. The co-founders, including Charlie Cleveland and Max McGuire, are now positioned to receive a performance-based payout of $250 million dependent on studio performance, with eligibility continuing until September 15, 2026.
Krafton had earlier defended the dismissals by claiming that Gill and his team had not achieved a timely launch for *Subnautica 2*. However, the court deemed these assertions unfounded, contending that the leadership changes were merely a facade and that previous arrangements concerning the roles of the co-founders were well known. The publisher’s justification shifted to allegations of unauthorized conduct by the leadership, which were also rejected by the court.
Krafton acquired Unknown Worlds in 2021 for $500 million, with the potential for further earnout payments based on revenue milestones. The judge indicated that pressures began escalating on Krafton as forecasts suggested that a successful early access launch could result in significant financial consequences for the publisher, raising concerns among Krafton executives about potentially overpaying for the studio.
The legal dispute intensified as Krafton sought justifications to dismiss the co-founders in what was termed “Project X,” reflecting the publisher’s attempts to manage the repercussions of its acquisition agreement. The court declared these actions represented a breach of contract.
Regarding the future of *Subnautica 2*, uncertainties persist over its release timeline and sales performance, which will dictate whether the revenue targets for the earnout can be achieved. The litigation concerning damages from the terminations is still in progress, with the court expected to consider potential financial damages and other claims from the co-founders in the forthcoming phase of the case.
Krafton has publicly affirmed its dedication to producing an outstanding product for *Subnautica* enthusiasts while signaling that it is reviewing its options in light of the ruling. The developer intends to enhance the game in preparation for its eventual Early Access release amid these ongoing legal challenges.
