Krafton and the leadership of Subnautica 2 developer Unknown Worlds Entertainment have reached a mutual settlement, ending a legal dispute that centered on executive termination and employee bonus structures. The agreement confirms the departure of Unknown Worlds CEO Ted Gill and mandates that Krafton pay bonuses to the studio’s staff, resolving all outstanding legal proceedings.
The Settlement Terms and Leadership Changes
Under the terms of the agreement, Krafton will provide bonus payments to all staff members at Unknown Worlds Entertainment. These bonuses will be distributed in three annual installments. The payout extends to all current employees, including those who joined the studio after Krafton’s 2021 acquisition.
Ted Gill, who served as CEO, will vacate his position as part of the settlement. Gill stated to Bloomberg that the parties "mutually agreed to part ways," noting that the studio will seek an external candidate to fill the CEO role. The legal battle previously saw a judge order Krafton to rehire Gill in March, a decision that preceded this final negotiated resolution.
Origins of the Legal Conflict
The dispute began last summer when Krafton removed Gill and Unknown Worlds co-founders Charlie Cleveland and Max McGuire from their roles. The executives filed a lawsuit alleging that Krafton terminated them and delayed the development of Subnautica 2 to 2026 to circumvent a $250 million bonus clause triggered by specific revenue milestones.
The conflict centered on the acquisition agreement signed in 2021. The executives argued that the studio’s financial performance met the criteria for these incentive payments, while the parent company’s actions were perceived as an attempt to avoid those contractual obligations.
Impact on Subnautica 2 Development
Subnautica 2 launched in Early Access in May, a milestone that served as a catalyst for the resolution. The title has achieved notable commercial success, selling more than 4 million copies to date.
In a statement provided to Engadget, Krafton confirmed the dismissal of all pending legal proceedings. The company stated that both entities are now focused on the ongoing development and 1.0 release of Subnautica 2.
Key Takeaways
- Settlement Reached: Krafton, Unknown Worlds, and the former leadership team have dismissed all legal claims.
- Bonus Payouts: Staff will receive bonuses in three annual installments, with total compensation expected to exceed the original acquisition terms.
- Leadership Transition: CEO Ted Gill is stepping down, with plans to hire an external successor.
- Commercial Performance: Subnautica 2 has sold over 4 million copies since its Early Access launch in May.
Moving forward, Unknown Worlds will continue to lead development on Subnautica 2, with Krafton providing support for the success of the game.
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