Ousted Subnautica 2 studio founder Charlie Cleveland has hit back at claims made by former employer Krafton in a newly unsealed court document, accusing the publisher of deliberately hindering the Subnautica 2 project in order to avoid paying out a $250m bonus.
Earlier this month, Krafton announced Cleveland – alongside chief executive officer Ted Gill and special projects director Max McGuire – had all departed Subnautica studio Unknown Worlds, but insisted it had “sought to keep the… co-founders and original creators of the Subnautica series involved in the game’s development”. Shortly after, though, it was claimed the team had been “pushed out”, and that the move was part of a plan by Krafton to avoid paying out a $250m bonus for the development team.
The report was followed by a delay for Subnautica 2 and Krafton’s own statement, insisting Unknown Worlds’ leadership team had “abandoned” their responsibilities. Specifically, the publisher said it had “asked [Cleveland] to devote himself to… Subnautica 2” but, “instead of participating in the game development, he chose to focus on a personal film project”.
However, as reported by Bloomberg, a lawsuit against Krafton, filed for breach of contract by Unknown Worlds’ former leadership team, claims that Cleveland was, in fact, working on a Subnautica movie the publisher is said to have specifically asked the studio to develop. Bloomberg journalist Jason Schreier later noted on social media that “Cleveland was also working on some sort of AI Christmas film, which Krafton was likely referring to. They just didn’t mention the Subnautica film part of it.”
As for the $250m bonus that increasingly appears to be at the centre of Krafton’s fallout with the former leadership team, the lawsuit alleges things began to turn sour in early 2025, when Gill started negotiating bonuses for employees who weren’t eligible under the original acquisition terms. In one part of the complaint reviewed by Bloomberg, it’s claimed: “After Krafton’s leaders reviewed Gill’s projections and evaluated the anticipated revenue and earnout numbers, everything changed.”
It’s alleged the combination of Subnautica’s release on mobile and Switch 2, alongside the impending early access launch of Subnautica 2, meant the studio was now presenting Krafton with revenue projections significantly higher than Unknown Worlds’ initial conservative estimates. It’s claimed this is the point Krafton began pushing to delay Subnautica 2 into 2026, halted its publishing duties – including marketing and localisation – and refused to support Subnautica 2’s planned summer release.
The lawsuit also alleges a senior Krafton executive told Gill “pulling these resources was a permissible way for [the company] to avoid supporting the earnout”, and that Krafton later asked Unknown Worlds’ leadership to accept a lower sum. It’s around this time Krafton head Changhan Kim is alleged to have written to Cleveland, Gill, and McGuire describing Subnautica 2’s progress as “slow and underwhelming”, and accusing them of “failing to fulfil [their] responsibilities”. This is despite the complaint’s claim that pre-release tests for Subnautica 2 “drew high marks and confirmed that the game was ready to meet… lofty expectations.”
According to Bloomberg, Cleveland, Gill, and McGuire are now seeking damages “in an amount to be determined at trial” following their termination.
All this comes after the mysterious leak of an internal Krafton review document this weekend, claiming Subnautica 2’s planned early access release lacked “the freshness and volume expected of a sequel”, and fell “short of meeting… high expectations”. Almost immediately after, Krafton took the unusual step of announcing, unprompted, that the document was real, claiming that doing so would ‘minimise speculation and ensure accurate communication with players’. It seems likely we’ll hear again from Krafton soon.
