The ongoing legal battle between Unknown Worlds Entertainment and their publisher Krafton over the future of Subnautica 2 has been going on for a while now. In fact, it has been ongoing since July 2025, when Krafton summarily fired the co-founders of UWE without cause, reason, or explanation. All apparently just to keep UWE from receiving a $250 million payout from the impending release of Subnautica 2. The future of the game has been in limbo since then, with the CEO of Striking Distance Studios (The Callisto Protocol) running the company in place of Ted Gill. However, that limbo is apparently now over.
Kotaku has just reported that the judge in the legal battle between the founders of Unknown Worlds Entertainment and Krafton has declared the founders the winner. That judge, Vice Chancellor Lori W. Will, officially declared that “Krafton breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.”
As part of this declaration, said judge has ordered Krafton to reinstate Ted Gill to his old position as CEO of Krafton, that Krafton return control of Subnautica 2‘s Early Access release schedule on Steam to Gill, and that Krafton extend the earnout period for the previously mentioned $250 million by the time in between Gill’s illegal firing and this legal ruling. The lattermost ruling means that UWE now has an additional nine months, up to September 15, 2026, to earn that payout.
Judge Declares Krafton Attempted to Manufacture Pretext for Firing Unknown Worlds Founders
Krafton’s own case against the Unknown Worlds founders has been…messy, to say the least. They first claimed that they fired Ted Gill and co. for failing to meet milestones for the development of Subnautica 2. Then partway through litigation, Krafton switched reasons entirely to claim that the founders had been working on other projects and had stolen development materials for the game.
The court rejected both claims, declaring that:
“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.”
Krafton CEO Motivated by Embarrassment Over Being Seen as a “Pushover”
Not only that, but the court also found that Krafton CEO Changhan Kim was centrally at fault for the illegal firings of Ted Gill and the other founders of Unknown Worlds. The judge wrote:
“[Krafton’s] models predicted that a successful August 2025 early access launch of Subnautica 2, with “over 1.67 million copies sold by Q4 2025,” would generate significant revenue and “trigger [the] earnout.” A “Financial Planning Base” case scenario indicated a $191.8 million total earnout payment, and a best-case scenario indicated a $242.2 million payment. These figures immediately captured the attention of CEO Kim. Kim, who had personally led the acquisition of Unknown Worlds, felt that Krafton had overpaid. He feared that making an earnout payment would earn him a reputation as a “pushover.””
It was after those findings, motivated by potential embarrassment, that pushed Krafton’s CEO to then look for ways to avoid the payout, and that led him to firing Ted Gill and co.. The result was a months-long plan by Krafton named “Project X” to manufacture pretext to fire the Unknown Worlds founders, which apparently included multiple consultations with ChatGPT with how to message the firings to Subnautica fans.
The Future of Subnautica 2 Looks Hopeful Now…Hopefully
Right now, the future of Subnautica 2 has never looked brighter. With the court’s ruling, Ted Gill and the other founders of Unknown Worlds are now back in full control of the company, and with the game back on course for Early Access release. No matter how the rest of the legal battle ensures, that much is certain.
The only potential spanner in the works here is Krafton themselves. Their public statement, sent as an email to Kotaku and other news outlets, about this ruling is as bizarre as it is self-aggrandizing. It reads:
Krafton Statement Regarding Legal Ruling
“Krafton puts players at the heart of every decision, and that will never change. Over the past several months, Krafton and the Unknown Worlds team have worked tirelessly to strengthen the game and prepare it for an Early Access release, with a continued focus on delivering the best possible experience for the Subnautica community. We look forward to pushing out the newly updated version as soon as possible for players.
“While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward. 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.”
A Krafton Spanner in the Works?
Krafton’s statement appears to admit no fault of their own, and doesn’t mention complying with the ruling at all. All while insisting to Subnautica fans that Krafton had their best interests in mind the entire time. Frankly, with the revelation that they use ChatGPT to write these statements, it comes off as insincere and tone-deaf at best.
At worst, it suggests that Krafton plan to either attempt to appeal the ruling (regardless of how appealable it is), find ways to get around the ruling, or defy the judge and court altogether. Personally, with the judge having ruled so firmly against Krafton, it will be most amusing to see them try to defy that judge. We shall see soon what Krafton plans to do here. Let’s hope it doesn’t affect Subnautica 2‘s development too much.
What do you all think? Are you ecstatic at seeing the Unknown Worlds founders take back their company and regain control of Subnautica 2? Tell us your joyfully maritime thoughts in the comment section below.
Source: Kotaku
That Hashtag Show
