If I needed to describe the standing of Subnautica 2 in simply three phrases, it will be these: messy, messy, messy. That’s to not say the recreation itself is in horrible form — this is really a pivotal declare in the entire scenario — however the relationship between Subnautica collection developer Unknown Worlds and its guardian firm, Krafton, is in shreds. This month alone, Krafton fired the founders and CEO of Unknown Worlds, Subnautica 2 was delayed till 2026 and the ousted leaders filed a lawsuit towards Krafton, seeking to regain artistic management of the recreation and the studio. At the heart of the battle is a bonus cost value as much as $250 million.

Right here’s a rundown of how we received right here and what in the satan is going on with Subnautica 2, Krafton and Unknown Worlds.

Charlie Cleveland by chance began Unknown Worlds in 2001 whereas constructing the common Half-Life mods Pure Choice and Pure Choice 2, and technical director Max McGuire got here on as an official studio co-founder in 2006. Impressed by Minecraft and burned out on mods, Unknown Worlds started working on the undersea, open-world exploration recreation Subnautica and launched it in early entry on Steam in 2014. With years of neighborhood suggestions, the recreation developed right into a singularly tense and wealthy survival expertise, and model 1.0 formally landed in 2018. This is additionally when Ted Gill joined the studio’s govt crew, liberating up Cleveland to focus on artistic path. Subnautica and its spin-off, Subnautica: Beneath Zero, attracted tens of millions of gamers and established Unknown Worlds as a profitable impartial crew.

So, the bigger studios got here sniffing. PUBG writer Krafton, which operates with billions of {dollars} yearly, bought Unknown Worlds in 2021 for $500 million. The acquisition got here with the promise of an extra payout value as much as $250 million if Unknown Worlds hit sure efficiency objectives by the finish of 2025. This bonus is a essential piece of the chaos at present.

We all know extra about the particulars of this deal because of current reporting by . Along with the management positions, which have been crammed by Cleveland, Gill and McGuire, Unknown Worlds had about 40 staff at the time of the Krafton sale, and so they acquired payouts totaling $50 million at closing and over the following two years. This bigger group was poised to obtain as a lot as $25 million in the 2025 performance-based earnout, with every particular person anticipating a special quantity, however most estimating six or seven figures. The remaining $225 million was reserved for the Unknown Worlds management, however they mentioned they supposed to share a portion of their windfall with staff who weren’t included in the bonus, protecting the full studio headcount of about 100 individuals.

The management of Unknown Worlds repeated this promise in a lawsuit filed towards Krafton on July 10, 2025. However we’re getting forward of ourselves.

After the acquisition, Unknown Worlds continued updating Subnautica and Beneath Zero. In February 2024, the studio launched Moonbreaker, a turn-based technique recreation that by no means actually took off, partially due to its . Since then, the studio has been targeted on Subnautica 2. The sport was with a potential early entry launch window of 2025. It’s at present the second-most wishlisted recreation on Steam, after Hole Knight: Silksong.

The primary public notion that one thing was rotten between Unknown Worlds and Krafton got here on July 2, when Cleveland, Gill and McGuire have been fired and changed by former Callisto Protocol studio head Steve Papoutsis. Krafton didn’t present a motive for the switch-up , as an alternative providing the following practically full thought: “Whereas Krafton sought to maintain the Unknown Worlds’ co-founders and unique creators of the Subnautica collection concerned in the recreation’s improvement, the firm needs them properly on their subsequent endeavors.”

Krafton didn’t point out delaying the early entry launch presently, however it applied a overview course of that it mentioned could be “important to delivering the proper recreation at the proper time.” The writer instructed the ousted leaders had been uncooperative on this side.

“Unknown Worlds’ new management absolutely helps this course of and is dedicated to assembly participant expectations,” its press launch mentioned.

Cleveland printed on July 4 reflecting on his time in recreation improvement, and sharing his disappointment at Krafton’s dealing with of Unknown Worlds and Subnautica 2. He additionally referenced Krafton’s intent to delay the launch.

“You possibly can see why for Max, Ted, myself, the Unknown Worlds crew, and for our neighborhood, the occasions of this week have been fairly a shock,” Cleveland wrote. “We all know that the recreation is prepared for early entry launch and we all know you’re able to play it. And whereas we thought this was going to be our choice to make, at the least for now, that call is in Krafton’s arms. And in spite of everything these years, to search out that I’m not in a position to work at the firm I began stings.”

On July 9, Krafton formally of Subnautica 2 to 2026. That very same day, Bloomberg printed a report outlining the performance-based bonus settlement and implicitly questioning how the timing of the delay would make it tough for the studio to hit its objectives, placing the payout in jeopardy. This was the first time the particulars of the bonus turned public.

Krafton with Engadget — and in a pop-up on — on July 10 that straight-up accused the fired leaders of abandoning the studio in favor of non-public artistic pursuits, particularly calling out Cleveland’s . It additionally threw shade at Moonbreaker and claimed the former bosses wished the bonus cost “for themselves.”

“Krafton made a number of requests to Charlie and Max to renew their roles as Sport Director and Technical Director, respectively, however each declined to take action,” the assertion mentioned. “Particularly, following the failure of Moonbreaker, Krafton requested Charlie to dedicate himself to the improvement of Subnautica 2. Nevertheless, as an alternative of taking part in the recreation improvement, he selected to focus on a private movie challenge. Krafton believes that the absence of core management has resulted in repeated confusion in path and vital delays in the general challenge schedule. The present Early Entry model additionally falls quick by way of content material quantity.”

That very same day, Cleveland introduced that he and the different ousted studio heads had towards Krafton.

“Suing a multibillion greenback firm in a painful, public and presumably protracted manner was actually not on my bucket checklist,” Cleveland wrote. “However this must be made proper. Subnautica has been my life’s work and I might by no means willingly abandon it or the wonderful crew that has poured their hearts into it. As for the earnout, the concept that Max, Ted and I wished to maintain all of it for ourselves is completely unfaithful.”

The lawsuit wasn’t unsealed till July 16. However on July 15, reported that Krafton now deliberate to increase the window for the bonus cost by an extra 12 months, giving the studio extra time to hit its objectives. The writer may also reportedly advance a portion of a separate profit-sharing bonus pool to all Unknown Worlds staff in 2025.

These strikes appear designed to moot the core points raised in the breach of contract criticism that Cleveland and different Unknown Worlds leaders filed towards Krafton in Delaware Chancery Courtroom. The lawsuit, unsealed on July 16, claims Krafton illegally fired the studio heads and delayed Subnautica 2 to be able to keep away from the bonus funds. It additionally gives a timeline of rising tensions between the founders and Krafton this 12 months, accusing the writer of intentional sabotage.

The lawsuit claims that Krafton and Unknown Worlds had a respectful relationship till April 2025, when Gill offered Krafton executives with the studio’s constructive income projections, which have been made with the assumption that Subnautica 2 would hit early entry in 2025. He additionally outlined the anticipated bonus payout underneath the settlement.

“When that occurred, every thing modified,” the lawsuit reads.

The criticism alleges that at this level, Krafton started searching for methods to power out the leaders of Unknown Worlds and delay the launch of Subnautica 2, with a purpose of circumventing the bonus cost. Cleveland, Gill and McGuire argued backwards and forwards with Krafton executives over whether or not the recreation was prepared for early entry, and Krafton finally pulled all of its sources from the studio. Krafton issued a cease order on Subnautica 2 improvement, took over Unknown Worlds’ communications channels and in June it began laying an inner paper path accusing the founders of abandoning their fiduciary duties, in line with the criticism.

Cleveland, Gill and McGuire have been fired and faraway from the Unknown Worlds board of administrators on July 1. This is the place the remainder of us entered the story.

The principle battle right here is over whether or not Subnautica 2 is actually prepared for an early entry launch, and that issues due to a possible $250 million bonus cost that’s jeopardized by a delay. Not solely is this a big sum for Krafton to lose, however it’s additionally an enormous sum of money for Cleveland, Gill and McGuire to overlook out on, particularly now that they’ve misplaced their studio and tentpole IP. The ousted leaders reiterated of their lawsuit that they “deliberate to share much more of the earnout with their devoted crew” than they have been contractually obligated to. In the criticism, they’re searching for Krafton to pay out the full bonus as projected with no delay, fulfill its obligations as a writer and reinstate them as the heads of Unknown Worlds.

Each occasion on this scenario claims they need what’s finest for Subnautica 2 and its gamers. It’s attainable that they’re all telling the fact and this is a easy disagreement over inventive integrity. It’s additionally attainable that they’re all mendacity and everybody is seeking to make (or hold) a fast buck — however man, that’s bleak. The reality, as traditional, probably lies someplace in between and, chances are high, we’ll by no means understand it. At the least the court docket system will finally have the ability to decide the second-best factor, which is who’s at fault.

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