Unknown Worlds Entertainment employees will receive their full bonuses after parent company Krafton resolved a protracted legal dispute with the studio's former leadership, according to a settlement announced this week.
The agreement comes roughly a year after Krafton fired CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire in summer 2023. Gill has since stepped down from his position, with the company now searching for a replacement. Krafton confirmed the settlement to IGN, emphasizing that both the publisher and developer remain committed to Subnautica 2's ongoing development.
"Krafton, Inc., Unknown Worlds Entertainment and Ted Gill, Charlie Cleveland, and Max McGuire have reached a mutual settlement and agreed to dismiss all pending legal proceedings," the company said in a statement. "Unknown Worlds and Krafton are focused on supporting Subnautica 2, its Early Access journey to the full 1.0 release and the global community that has made the franchise so special."
The underwater survival game has become a commercial juggernaut since entering early access in May 2023, moving 4 million copies and reaching 467,000 concurrent players on Steam. Behind the scenes, however, a bitter legal battle had been brewing over a $250 million bonus tied to development milestones.
The Dispute
When Krafton terminated Gill and the co-founders, it blamed development delays and performance issues on the trio. The company claimed the fired executives were attempting to trigger the bonus payout, which would have activated upon an early access launch. Gill and his partners immediately sued, arguing they were terminated precisely to prevent Krafton from honoring that obligation.
The conflict intensified when Krafton countersued, accusing the former leaders of stealing company documents and demanding a $250 million payout they "haven't earned." The dispute escalated to Delaware's Court of Chancery, where a March ruling sided decisively with the terminated executives.
The court's decision exposed internal Krafton communications that painted a damning picture. Vice-Chancellor Lori Will's ruling revealed that Krafton CEO Changhan Kim had viewed the earnout as a "bad deal" and felt "taken advantage of" as financial projections showed Subnautica 2 would trigger the bonus. Kim's legal team warned him the earnout remained binding even if leadership faced termination, and that attempting to avoid it risked lawsuits and reputational damage.
Kim then turned to ChatGPT for guidance, according to court documents. The AI initially suggested the earnout would be "difficult to cancel," but later recommendations led Kim to establish an internal task force dubbed "Project X." The group's explicit mandate was to either renegotiate the bonus or execute a takeover of Unknown Worlds. "Over the next month, Krafton followed most of ChatGPT's recommendations," Will noted in the ruling.
Development continues at a steady pace. Unknown Worlds has announced plans to add a new vehicle and explore territory centered around the Collector Leviathan during the game's extended early access period. The studio has also clarified that players should not expect to directly kill fish in the game.
Author Emily Chen: "The ChatGPT subplot alone makes this one of the wildest corporate sagas in gaming, but what matters is the studio gets paid and the game keeps shipping."
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