Things are heating up between Krafton and the former Subnautica leads, with new court docs and dev reports now out in the open.
The saga between the Unknown Worlds founders and Krafton continues, as a newly public lawsuit sheds more light on the Subnautica 2 fallout.
Charlie Cleveland, Max McGuire, and Ted Gill, co-founders of the Subnautica developer, were fired earlier this year following internal disputes over the game’s direction. Krafton argued the title wasn’t ready for release, while the trio claimed it was on track and that their removal was unjustified.
The lawsuit, a 58-page document filed on 10 July 2025 in the Delaware Chancery Court and unsealed on 16 July, accuses Krafton of breaching its acquisition terms to delay the game’s launch and avoid a $250 million earn-out payment.
According to the filing, Krafton repeatedly blocked marketing and development efforts ahead of Subnautica 2’s originally planned 2024 reveal. The ousted team alleges this was a deliberate effort to push the game past the earn-out period outlined in Krafton’s 2021 acquisition of Unknown Worlds. If certain financial targets had been met before that deadline, Krafton would have owed more than $250 million.
Just a day before the lawsuit surfaced, Krafton confirmed the authenticity of a leaked internal Subnautica 2 development report, which it said highlighted why the title wasn’t ready. The timing further escalated the dispute between the company and the fired leadership.
Charlie Cleveland, one of the ousted co-founders, share a new statement on 16 July, hours after the complaint was unsealed.
“It’s unfortunate we are here in this situation but we’re doing everything we can to make things right for everyone,” Cleveland said in his statement. Openness and transparency is my thing so we’re glad to bring this truth to light,” he added.
Krafton had removed Cleveland, Max McGuire, and Ted Gill from their leadership roles at Unknown Worlds earlier this year. The trio’s removal came after months of internal disagreements over the direction and timeline of Subnautica 2, a live-service multiplayer follow-up to the popular single-player exploration game.
What does the 58-page lawsuit contain?
The lawsuit, filed by Fortis Advisors on behalf of the sellers, details a long timeline of alleged interference:
- Krafton allegedly blocked the hiring of essential staff, including a product manager and marketing director.
- The publisher reportedly rejected over 20 proposed marketing beats, including early access and announcement plans.
- Claims that the game was “not ready” were disputed internally, with multiple devs stating it was in a “launchable” state.
- Attempts to share the roadmap with press or tease a reveal trailer were allegedly shut down.
The ousted founders argue that Krafton’s actions caused substantial harm to the game’s momentum and team morale. Cleveland, McGuire, and Gill are now seeking damages to be determined at trial.
Krafton has yet to release a statement regarding this update.
