Last summer, the ousted leadership team at Subnautica 2 developer Unknown Worlds launched a lawsuit against its parent company Krafton alleging wrongful termination and an attempt to bypass a previously negotiated multi-million dollar bonus. Now, a ruling has come down in favor of the plaintiffs that orders Krafton to reinstate CEO Ted Gill to his former position and return control of Subnautica 2’s release plans. The judgment also calls out Krafton’s decision to use a ChatGPT-inspired legal strategy to avoid paying Unknown Worlds co-founders Charlie Cleveland and Max McGuire, as well as Gill.
The judge’s decision has been released online, and it features a detailed timeline of Krafton’s alleged actions, particularly Krafton CEO Changhan Kim, who consulted with ChatGPT to find a way out of paying the performance bonus that the company had internally calculated would be between $191.8 million and $242.2 million. Krafton’s internal legal team cautioned Kim against following the strategy laid out by ChatGPT, but those words of caution were apparently ignored.
According to the ruling, Krafton followed some of the steps laid out by ChatGPT, including removing Unknown Worlds’ ability to release Subnautica 2 on Steam. It also notes that Krafton’s actions had the desired effect of bringing Unknown Worlds’ leadership team to negotiations over a potentially lesser amount for their bonus. But when those negotiations stalled, Krafton fired Cleveland, McGuire, and Gill.
That trio anticipated their dismissal and backed up a large amount of Subnautica 2’s data beforehand. Krafton retroactively attempted to use that as a justification for their dismissal. The judge didn’t find in their favor, and added “Krafton’s newly manufactured justifications for the terminations are pretextual. Cleveland and McGuire had taken on limited roles, but that was long known to and accepted by Krafton. As for the data downloads, the former employees were acting to protect the studio’s work product amid Krafton’s takeover attempt. They kept the data confidential and promptly returned it.”
Cleveland and McGuire’s positions were not restored by the ruling, but the court notes that Gill has the authority to rehire them. Additionally, the previously agreed upon period to meet the sales goals necessary for the performance bonus has been extended to September 2026. A second phase of the decision will determine whether the plaintiffs are entitled to damages and “revenues permanently lost due to Krafton’s breaches and litigation delays.”
Krafton has responded to the ruling, and it doesn’t sound like the legal fight will be over any time soon.
“While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward,” said a Krafton representative in a statement to Kotaku. “Today’s ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, Krafton’s immediate focus remains unchanged: delivering the best possible game to Subnautica’s fans.”