The behind-the-scenes drama surrounding Subnautica 2 has reached boiling point, as Krafton has officially responded to a lawsuit filed by the game’s former leads. In a scathing statement, Krafton accused the ex-leadership of abandoning their responsibilities, neglecting development, and attempting to rush the game’s release for one reason to secure a quarter-billion-dollar payout.
The lawsuit, filed last month by former Unknown Worlds CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire, claimed Krafton intentionally delayed the game’s development, sabotaged its release timeline, and ultimately fired them to avoid paying a $250 million earnout bonus that would have been triggered if Subnautica 2 hit early access on schedule and met certain sales goals.
Krafton’s rebuttal paints a very different picture. According to the publisher, Subnautica 2 was initially planned for a Q1 2024 release, but Cleveland and McGuire allegedly stepped away from their roles as Game Director and Technical Director to focus on personal side projects. Gill, they claim, stayed on but shifted his priorities toward maximizing the earnout payment rather than creating a polished game.
By 2023, Krafton says even internal leadership had noticed the founders were “checked out,” with Cleveland publicly stating he had moved on from video games to filmmaking. The game’s release slipped from 2024 to 2025, and when an internal review of the first playable build was conducted in March 2024, the results reportedly showed a lack of promised new content. Instead of addressing these concerns, Krafton alleges the leads blamed others, reduced the scope of the game, and shuffled the development team.
The most explosive claim came when Krafton alleged the founders were pushing for an early access launch in 2025 despite the game being “underbaked” a move Krafton says was solely to trigger the $250 million payout. The company claims the leads refused requests to return to their posts to help finish the game and even discussed self-publishing the title without Krafton while downloading “massive amounts of confidential information” from Unknown Worlds.
“Krafton, fearing how an unfinished Subnautica 2 would damage the franchise and disappoint fans, tried to stop the rushed release,” the statement reads. “But the former leads’ focus was always on their payday, not the game.” According to the publisher, conversations dating back to 2022 reveal the earnout was the driving force behind the founders’ decisions, with one employee allegedly stating, “Ted will concoct a scheme to get us that earnout.”
The response from Krafton formally denies the allegations in the lawsuit, addresses each point line by line, and calls on the court to rule in its favor while awarding the company its legal costs and attorney fees.
This bitter clash began in July when Krafton unexpectedly announced the replacement of Unknown Worlds’ leadership with former Striking Distance CEO Steve Papoutsis. The move quickly unraveled into a public feud when the $250 million bonus arrangement was revealed, leading to accusations, leaked documents, and conflicting narratives about the game’s readiness for release.
Whether Subnautica 2 was truly on track for launch or still far from completion remains one of the central questions in this legal storm. One thing is certain this fight has gone from a dispute over a game’s timeline to a high-stakes courtroom battle that could reshape the future of the beloved underwater survival series.
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