Subnautica 2’s development just took a dramatic turn. Former developers are reportedly launching legal action against publisher Krafton, which has claimed they “abandoned” the project. This bombshell follows the recent departures of key leadership figures at Unknown Worlds, including CEO Ted Gill, co-founder Charlie Cleveland, and co-founder Max McGuire.
Krafton announced these surprising exits without providing reasons or statements from the departing executives. According to their announcement, the trio left despite Krafton’s efforts to keep them involved in the game’s development. Steve Papoutsis, formerly the CEO of Striking Distance, is stepping in as the new head of Unknown Worlds.
The fallout from this situation is significant, particularly with Krafton now delaying the release of Subnautica 2 to 2026, turning it into the second-most-wished-for upcoming game on Steam. This delay could impact the studio, as a Bloomberg report suggests Krafton decided to push the game back just before a scheduled $250 million bonus payout intended for the development team of around 100 employees.
Interestingly, this postponement allegedly contradicts the wishes of the original leadership team. By stalling the game’s release to next year, Krafton may miss milestones that would have triggered the bonus payout. In a subsequent statement, Krafton emphasized that the delay was “not influenced by any contractual or financial considerations.” However, this statement stands in stark contrast to assertions made by Subnautica 2’s former director, who claimed the game was “ready for early access release.”
Further complicating matters, Krafton accused the departed leadership of neglecting their responsibilities to pursue other projects, including a film, which they claim led to ongoing delays. They also alleged that 90% of the $250 million payout was earmarked for the three executives. “Krafton believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule,” they stated. The disappointment expressed by Krafton highlights a significant rift between the publisher and the studio’s former leadership.
The legal saga took another twist when Cleveland revealed that the former leadership has filed a lawsuit against Krafton. “Suing a multi-billion dollar company in a painful, public, and possibly protracted way was certainly not in my bucket list,” he stated. “But this needs to be made right. Subnautica has been my life’s work, and I would never willingly abandon it or the amazing team that has poured their hearts into it.”
In an unprecedented move, a selection of confidential slides detailing Subnautica 2’s development progress leaked online, indicating that content had been downsized due to missed deadlines. Krafton quickly confirmed the authenticity of these documents, stating, “Given these circumstances, transparent communication is necessary… minimizing speculation and ensuring accurate communication with players must take precedence.”
According to Bloomberg journalist Jason Schreier, the lawsuit filed by the former employees against Krafton is for breach of contract. The evolving situation continues to cast uncertainty over the future of Subnautica 2 and raises questions within the gaming industry about project management and developer rights.