What the hell is happening with Subnautica 2?

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 sport itself is in horrible form — that is really a pivotal declare in the entire scenario — however the relationship between Subnautica sequence developer Unknown Worlds and its father or mother 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 in opposition to Krafton, trying to regain inventive management of the sport and the studio. On the middle of the battle is a bonus cost price as much as $250 million.

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

Charlie Cleveland by chance began Unknown Worlds in 2001 whereas constructing the favored 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 engaged on the undersea, open-world exploration recreation Subnautica and launched it in early entry on Steam in 2014. With years of group suggestions, the sport developed right into a singularly tense and wealthy survival expertise, and model 1.0 formally landed in 2018. That is additionally when Ted Gill joined the studio’s govt group, releasing up Cleveland to give attention to inventive course. Subnautica and its spin-off, Subnautica: Under Zero, attracted hundreds of thousands of gamers and established Unknown Worlds as a profitable impartial group.

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 price as much as $250 million if Unknown Worlds hit sure efficiency targets by the tip of 2025. This bonus is a essential piece of the chaos at the moment.

We all know extra concerning the particulars of this deal due to latest reporting by . Along with the management positions, which have been crammed by Cleveland, Gill and McGuire, Unknown Worlds had about 40 staff on the time of the Krafton sale, and so they acquired payouts totaling $50 million at closing and over the next two years. This bigger group was poised to obtain as a lot as $25 million within the 2025 performance-based earnout, with every individual anticipating a distinct 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 within the bonus, protecting the total studio headcount of about 100 folks.

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

After the acquisition, Unknown Worlds continued updating Subnautica and Under 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 presently 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 purpose for the switch-up , as an alternative providing the next practically full thought: “Whereas Krafton sought to maintain the Unknown Worlds’ co-founders and unique creators of the Subnautica sequence concerned within the recreation’s growth, the corporate needs them effectively on their subsequent endeavors.”

Krafton didn’t point out delaying the early entry launch at the moment, but it surely carried out a assessment course of that it mentioned could be “important to delivering the proper recreation on the proper time.” The writer advised the ousted leaders had been uncooperative on this side.

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

Cleveland revealed on July 4 reflecting on his time in recreation growth, 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’ll be able to see why for Max, Ted, myself, the Unknown Worlds group, and for our group, the occasions of this week have been fairly a shock,” Cleveland wrote. “We all know that the sport 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 fingers. And in any case these years, to search out that I’m now not in a position to work on the firm I began stings.”

On July 9, Krafton formally of Subnautica 2 to 2026. That very same day, Bloomberg revealed 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 targets, placing the payout in jeopardy. This was the primary time the small print of the bonus grew to become 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 private inventive pursuits, particularly calling out Cleveland’s . It additionally threw shade at Moonbreaker and claimed the previous 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. “Specifically, following the failure of Moonbreaker, Krafton requested Charlie to commit himself to the event of Subnautica 2. Nonetheless, as an alternative of collaborating within the recreation growth, he selected to give attention to a private movie challenge. Krafton believes that the absence of core management has resulted in repeated confusion in course and vital delays within the general challenge schedule. The present Early Entry model additionally falls quick when it comes to content material quantity.”

That very same day, Cleveland introduced that he and the opposite ousted studio heads had in opposition to Krafton.

“Suing a multibillion greenback firm in a painful, public and presumably protracted approach was actually not on my bucket record,” Cleveland wrote. “However this must be made proper. Subnautica has been my life’s work and I’d by no means willingly abandon it or the superb group 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 targets. The writer will even 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 within the breach of contract grievance that Cleveland and different Unknown Worlds leaders filed in opposition to Krafton in Delaware Chancery Court docket. The lawsuit, unsealed on July 16, claims Krafton illegally fired the studio heads and delayed Subnautica 2 with the intention 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 introduced Krafton executives with the studio’s constructive income projections, which have been made with the idea that Subnautica 2 would hit early entry in 2025. He additionally outlined the anticipated bonus payout beneath the settlement.

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

The grievance alleges that at this level, Krafton started on the lookout for methods to pressure out the leaders of Unknown Worlds and delay the launch of Subnautica 2, with a aim of circumventing the bonus cost. Cleveland, Gill and McGuire argued backwards and forwards with Krafton executives over whether or not the sport was prepared for early entry, and Krafton finally pulled all of its assets from the studio. Krafton issued a cease order on Subnautica 2 growth, 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 response to the grievance.

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

The principle battle right here is over whether or not Subnautica 2 is de facto 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 that this a big sum for Krafton to lose, but it surely’s additionally an enormous amount of cash 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 group” than they have been contractually obligated to. Within the grievance, they’re on the lookout for Krafton to pay out the total bonus as projected with out a delay, fulfill its obligations as a writer and reinstate them because the heads of Unknown Worlds.

Each celebration on this scenario claims they need what’s greatest for Subnautica 2 and its gamers. It’s potential that they’re all telling the reality and it is a easy disagreement over creative integrity. It’s additionally potential that they’re all mendacity and everyone seems to be trying to make (or maintain) a fast buck — however man, that’s bleak. The reality, as regular, doubtless lies someplace in between and, chances are high, we’ll by no means understand it. A minimum of the court docket system will finally be capable to decide the second-best factor, which is who’s at fault.

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