A judge has officially ordered the return of the original leadership at the studio behind Subnautica 2, ending a messy legal conflict that had stalled one of the most anticipated titles on Steam. The court ruled that the 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 that saw the founders fired and the future of Subnautica 2 thrown into uncertainty.
The friction between the two companies began shortly after Krafton purchased Unknown Worlds back in 2021. As part of that deal, a massive performance-based bonus was on the table, which could have seen the development team earn up to $250 million if the studio hit specific financial goals by the end of 2025. To reach those numbers, the team had planned to launch Subnautica 2 in Early Access in late 2024 or early 2025, a window that would likely have triggered the payout. However, the relationship soured as the deadline approached, leading to a sudden corporate takeover that removed the very people who created the Subnautica franchise.
Subnautica 2’s Krafton Controversy Explained
Krafton has come under fire for terminating the leadership team of Unknown Worlds, the developers of Subnautica 2, ahead of a $250 million payout.
Court Overturns “Wrongful” Termination of 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 a valid reason. The judge described the publisher’s actions as “wrongfully usurping operational control” and declared the July 2025 board resolution that ousted the leaders to be ineffective. The court has now ordered the publisher not to interfere with Gill’s power over the project’s roadmap, budget, or launch strategy.
The ruling was particularly scathing regarding the motives behind the firings. According to Bloomberg Law, the court found that Krafton’s claims about the founders being “disengaged” were a pretext. Instead, the evidence suggested that the publisher engaged in “obstructionist tactics,” such as pulling marketing support and blocking key partnerships, specifically to ensure the game would miss its 2025 release window. The judge noted that the sequel was actually “feature-complete” and ready for a debut as early as late 2024, but Krafton sought to “frustrate” the milestones to avoid the $250 million payout.
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 AI chatbot to brainstorm ways to avoid paying the multi-million dollar bonus. The lawsuit claimed that ChatGPT actually advised the CEO that it would be “difficult to cancel the earn-out.” Despite this advice, the publisher moved forward with the dismissals, citing an “absence of core leadership” as the official cause.
Internal messages uncovered during the trial further fueled the founders’ claims. Exchanges between top Krafton executives suggested that they feared the payout would lower the studio’s long-term value. One message even proposed that it might be “easier to take over” the studio than to renegotiate a lower bonus. Krafton has denied these allegations, insisting that the delay of Subnautica 2 was strictly about improving the game’s quality and ensuring it lived up to fan expectations.
In an unusual move, the judge decided that simply paying the founders for their lost wages wouldn’t be enough. According to Bloomberg Law, the court ruled that the “unique creative vision” of the original team was essential for the game’s reputation and the studio’s survival. As a result, several legal orders have been issued to resolve the dispute. Ted Gill is reinstated as the CEO of Unknown Worlds and now has full operational authority over the product roadmap, budgeting, and launch planning for the sequel. Krafton must immediately restore Gill’s administrative access to the Steam platform so that he can manage the title’s presence on the store. Because Krafton’s interference made the original 2025 deadline impossible to meet, the judge has extended the $250 million earnout eligibility period through mid-September 2026. Additionally, the co-founders maintain a contractual right to request a further extension of this payout window to March 15, 2027, if necessary.
Rearrange the covers into the correct US release order.
Rearrange the covers into the correct US release order.
Easy (5)Medium (7)Hard (10)
While a specific release date has not been set, Subnautica 2 is now expected to move toward its Early Access launch on PC and Xbox Series X/S later this year. With the original leads back at the helm, fans appear to expect the sequel to stay true to the vision that made the first game a hit. Unknown Worlds has also confirmed that the game will not feature generative AI, a notable stance given Krafton’s recent branding of itself as an “AI-first company”.
According to Bloomberg, a spokesperson for Krafton stated that while they “respectfully disagree” with the ruling, they are evaluating their options for the path forward. Meanwhile, the founders called the decision a “complete vindication” of their team’s hard work. For now, the legally barred interference from Krafton means the developers are finally free to finish the game on their own terms.
Source: Delaware Chancery Court
