Subnautica 2 dispute deepens: founders allege Krafton used AI to dodge earnout as release slips to 2026
A bitter legal battle over Subnautica 2 has erupted between its creators and their publisher, with new court filings alleging that Krafton sought AI-generated advice to avoid paying a massive earnout tied to the sequel’s success. The filings, shared by Unknown Worlds Entertainment co-founder Charlie Cleveland, paint a picture of escalating tensions that culminated in leadership shake-ups, a delayed release, and dueling lawsuits.
Here’s what the documents claim. Krafton acquired Unknown Worlds Entertainment (UWE) in October 2021 for $500 million, agreeing to pay the founders up to an additional $250 million if sales targets—centered on Subnautica 2—were met. In late 2024, UWE announced an early access launch window of 2025. Roughly six months later, Krafton laid off the founders and subsequently pushed Subnautica 2 to early 2026, citing a need for further improvements from remaining UWE and Krafton teams. The founders allege this timing wasn’t a coincidence and would conveniently place the earnout out of reach.
The latest filing goes further, claiming Krafton leadership explored ways to “cancel the earn-out,” even consulting ChatGPT for possible legal strategies. Internal references to a “Project X” are presented as evidence that Krafton considered two tracks: strike a deal on the earnout or take over the studio outright. When negotiations stalled, the filing alleges, leadership decided a takeover would be “easier.”
Text messages included in the documents reportedly show Krafton executives discussing payout renegotiations. One exchange attributes to Richard (Sang-Han) Yoon a proposal in which the founders sought $75 million for themselves and $40 million for team members, while Krafton’s internal figure for the team was “~10m.” The message concludes, “It might be easier just to take over.” Another executive, Chang Han Kim, is quoted as saying, “Set a date and send a letter, if you need to send it in advance.”
Krafton disputes these characterizations. In a response, the publisher argues the AI claim is a distraction and alleges the founders urged key employees to delete anything “incriminating” from their ChatGPT accounts. Krafton also says it offered to extend the earnout period if the founders returned to their “contractually required roles.” In the publisher’s view, the layoffs and delay were tied to project needs and governance issues, not a scheme to avoid payment.
The legal fight is now two-sided. Alongside the founders’ lawsuit, Krafton has filed a countersuit alleging mismanagement, theft of files, and the sharing of confidential information. Both cases are active, and neither side appears ready to back down.
For players, the key takeaway is that Subnautica 2 is still targeting an early 2026 release. The move from a 2025 early access plan to a later full launch window suggests the teams are focusing on broader improvements. However, the ongoing litigation may shape how the studio and publisher work together as the game approaches release.
Why this matters to the Subnautica community and the industry:
– Earnouts and creative control: The case centers on a high-stakes earnout that can influence timelines, staffing, and decision-making on a marquee title.
– AI in the boardroom: The allegation that leadership consulted ChatGPT for legal maneuvering adds a new wrinkle to how AI is being used in corporate strategy.
– Transparency and trust: Text messages and internal project codenames like “Project X” will be scrutinized as the court weighs intent versus business necessity.
As of now, Subnautica 2 remains in development with a planned early 2026 launch window. The outcome of these lawsuits could impact not only the studio’s leadership and finances but also how future milestones are set and communicated. Fans eager to return to the depths will be watching closely as the legal tide shifts—and as development progresses toward that new release target.
