Court Orders Krafton To Reinstate Subnautica 2 CEO In Ongoing Legal Battle
A court has ruled in favour of the co-founders of Unknown Worlds Entertainment in their legal dispute with Krafton over the development of Subnautica 2, ordering the reinstatement of CEO Ted Gill.
The ruling marks a significant development in the ongoing conflict between the studio’s leadership and its parent company. Krafton had previously accused key members of the development team of abandoning their responsibilities, while the co-founders argued that the publisher was attempting to delay the game’s release to avoid a potential $250 million payout tied to performance targets.
According to the court’s decision, Krafton breached its agreement by terminating key employees without valid cause and by taking control of the studio’s operations improperly. As a result, the dismissal of Gill and other executives has been declared invalid.
The court also directed Krafton to restore Gill’s authority over the early access launch of Subnautica 2 and reinstate his access to the Steam platform.
In addition, the judge extended the deadline for the $250 million bonus earnout tied to the game’s performance to September 15, 2026, giving the studio more time to meet its targets.
The ruling further stated that Krafton’s reasons for the terminations were not justified, describing them as “pretextual.” It noted that the company had previously been aware of and accepted the limited roles of certain co-founders.
On the issue of internal data handling, the court found that employees had downloaded company data as a precautionary step to protect the studio’s work during what they viewed as a takeover attempt. The data was reportedly kept confidential and later returned.
Financial projections presented during the case indicated that a successful early access launch in August 2025 could have led to strong commercial performance. Estimates suggested the game might have sold more than 1.67 million copies by the end of 2025, potentially triggering a substantial earnout payout ranging between approximately $191.8 million and $242.2 million.
The court also referenced internal concerns within Krafton’s leadership about the financial implications of such payouts, suggesting that efforts may have been made to avoid triggering the earnout.
In response to the ruling, Krafton said it disagrees with the decision and is currently reviewing its options. The company added that its focus remains on delivering a high-quality experience for players and moving forward with the game’s development.
However, the legal dispute is far from over, as claims related to damages and the earnout agreement are still pending and will be addressed in further proceedings.
