Krafton took a PR hit this week as it announced that it had replaced the leadership of its Unknown Worlds studio and pushed back the launch of Subnautica 2 to 2026. Allegations surfaced that it made the move to avoid a $250 million payout to the former leaders.
But today, Krafton hit back hard at those leaders: cofounders Charlie Cleveland and Max McGuire, and CEO Ted Gill, who were replaced last week. Steve Papoutsis of Striking Distance Studios, another Krafton property, was named the new CEO at the time.
In the meantime, the founders of Unknown Worlds have filed a lawsuit against Krafton.
Addressing 12 million “fellow Subnauts,” Krafton thanked their passion and said it wanted to provide clarity on the recent leadership changes at Unknown Worlds, a creative studio under Krafton. It’s a dramatic situation, and the dispute represents potential embarrassment for both Krafton and the former leaders.
Krafton acquired Unknown Worlds in 2021. Subnautica launched in 2018 as an undersea survival game. It was a big hit.
Background of Leadership Change
Krafton said it deeply values Subnautica’s unique creativity and immersive world-building. To provide fans with even better gaming experiences, the company acquired Unknown Worlds, fully committed to supporting Subnautica’s future success.
“We collaborated closely with the studio’s leadership, who were central to the creation of the original Subnautica, to foster the optimal environment for a successful Subnautica 2,” Krafton said.
Krafton agreed to pay $500 million for the purchase, but $250 million was earmarked as “earn-out compensation” that would be paid if milestones were hit.
The company said it allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives, “with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.”
Krafton said that didn’t happen.
“However, regrettably, the former leadership abandoned the responsibilities entrusted to them. Subnautica 2 was originally planned for an Early Access launch in early 2024, but the timeline has since been significantly delayed,” Krafton said. “Krafton made multiple requests to Charlie and Max to resume their roles as game director and technical director, respectively, but both declined to do so. In particular, following the failure of Moonbreaker, Krafton asked Charlie to devote himself to the development of Subnautica 2. However, instead of participating in the game development, he chose to focus on a personal film project.”
Krafton said it believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule. The current Early Access version also falls short in terms of content volume.
“We are deeply disappointed by the former leadership’s conduct, and above all, we feel a profound sense of betrayal by their failure to honor the trust placed in them by our fans,” Krafton said.
Krafton also said, “To uphold our commitment to provide you with the best possible gaming experience, we made the difficult yet necessary decision to change the executive leadership. Subnautica 2 has been and continues to be actively developed by a dedicated core team who share genuine passion, accountability, and commitment to the game. We deeply respect their expertise and creativity and will continue to provide full and unwavering support, enabling them to focus solely on delivering the exceptional game you deserve.”
Additionally, Krafton said it has committed to fair and equitable compensation for all “remaining Unknown Worlds employees who have continuously and tirelessly contributed to Subnautica 2’s development.”
Krafton said, “We believe that the dedication and effort of this team are at the very heart of Subnautica’s ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised. Fans will always remain at the center of every decision we make at Krafton. Moving forward, we promise transparent communication and continued efforts to sustainably develop and expand the beloved Subnautica universe.”