A major legal shake-up has just changed the future of Unknown Worlds and Subnautica 2.
The Delaware Court of Chancery has issued a new opinion siding with former Unknown Worlds leadership, ruling that publisher Krafton breached its contract after acquiring the studio in 2021. As a result, the court has ordered that Ted Gill, the studio’s former CEO, be reinstated and returned to control of the company.
The decision centers on the court’s finding that Gill’s dismissal happened without “just cause.” That matters because it doesn’t just impact job titles—it directly affects who gets to make the key decisions about the studio’s direction and its most valuable game property. Under the ruling, Gill regains control of the studio’s work and the Subnautica 2 project itself, including the right to release Subnautica 2 in early access on Steam, which aligns with the game’s original early access plans.
Notably, while Gill is returning as CEO, Unknown Worlds co-founders Charlie Cleveland and Max McGuire are not being restored to their former roles. Gill’s reinstatement is the headline outcome, but it doesn’t reset the entire leadership team to how it was before the conflict.
The dispute traces back to Krafton’s claims that the co-founders were removed because Subnautica 2 had been released “prematurely.” Krafton pointed to what it described as a lack of readiness as justification. The former leadership pushed back, arguing the plan was always to launch in early access—meaning an in-progress release was part of the intended development path rather than a violation of expectations.
After legal action was filed by Gill’s legal team, Krafton reportedly shifted its stance, alleging Cleveland and McGuire had entered a kind of semi-retirement and claiming that all three founders had downloaded large amounts of company data. But the new court ruling ultimately lands against Krafton’s actions, finding the contract was breached and ordering control returned to Gill.
One of the most striking parts of the opinion is the court’s discussion of the financial motivations behind the leadership shake-up. The ruling notes that Krafton’s actions were tied to avoiding a substantial $250 million earn-out bonus. According to the decision, as Unknown Worlds’ financial performance approached the earn-out threshold—reported as $69.8 million—Krafton leadership was focused on reducing exposure to the payout. The judge’s opinion describes internal efforts, including a “Project X,” aimed at either forcing a revised deal or executing what was described as a studio takeover, with terminating the founders considered and ultimately used as a tactic.
The court also ordered an extension of the earn-out calculation period by 258 days. This adjustment is meant to account for the time during which Krafton removed the founders and assumed control, effectively preventing that disputed window from disadvantaging the earn-out measurement.
Next steps are coming quickly. Both sides are required to submit a formal draft reflecting the court’s decision within three business days, setting the stage for how the ruling will be implemented in practice.
Subnautica 2 remains in development for Windows PC and Xbox Series X|S. For fans, the key takeaway is that the game’s direction—and the ability to pursue an early access release—now sits under the reinstated leadership of Ted Gill following the court’s decision.
