The Subnautica 2 Saga Just Keeps Getting Messier As Founders Sue And Publisher Confirms Leaks

The mysterious firing of Subnautica 2 studio Unknown Worlds’ founders earlier this month keeps taking unexpected turns, and the latest is that the veteran game developers are now suing publisher Krafton over the dismissals, which occurred with a $250 million payout on the line. Caught in the apparent crossfire is the game itself, the second-most-wishlisted on Steam, which the publisher delayed to 2026 amid the power struggle.

“We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public – you all deserve the full story,” franchise creative director Charlie Cleveland wrote on Reddit last night, hours after the publisher accused him and fellow former studio leaders Max McGuire and CEO Ted Gill of failing to get Subnautica 2 ready for launch. “Suing a multi-billion dollar company in a painful, public and possibly protracted way was certainly not on my bucket list. But this needs to be made right. Subnautica has been my life’s work and I would never willingly abandon it or the amazing team that has poured their hearts into it.”

Unknown Worlds was sold to Krafton in 2022 for roughly $500 million. If the studio hit revenue targets this year, the founders were on track to get an additional $250 million payout, with a percentage of that going to the rank-and-file developers on the studio floor. But delaying Subnautica 2‘s Early Access launch to 2026 makes hitting that goal basically impossible. Krafton says it didn’t fire them to avoid the payout, but because the founders failed to deliver a launch-quality version of Subnautica 2 as promised. Cleveland, who directed the first game, has for his part clamed the game was ready.

There are now also alleged leaks of an internal May 2025 milestone review floating around online that paint a messy picture of the game’s development timeline. It includes an assessment that Subnautica 2‘s Early Access version was too content-light to “drive IP growth and expansion” and calls for 30 percent more content, including additional biomes, creatures, and narrative chapters. If accurate, it would lend credence to Krafton’s recent claims, though for now the alleged leak remains unsubstantiated. The publish declined to comment on it.

Update 7/14/2025 8:10 a.m. ET: Over the weekend, Krafton’s PR reached out to Kotaku to confirm the leaks, which reinforce that the publisher’s claims that it felt Subnautica 2 needed more time to add features were in fact real and accurate.

It wrote in a press release:

The document that has been circulating on social media and reported by various outlets is indeed part of an internal milestone review conducted as part of the Subnautica 2 project. Krafton has confirmed that portions of it have been leaked and are now being widely shared across online platforms and within the fan community. KRAFTON recognizes the confusion this has caused.

Given these circumstances, Krafton has determined that transparent communication is necessary and has chosen to confirm the authenticity of the document. Krafton believes that minimizing speculation and ensuring accurate communication with players must take precedence.

Milestone reviews are conducted regularly in collaboration with Krafton’s creative studios across all projects. These reviews help assess development progress, define clear objectives, and ensure that each project aligns with KRAFTON’s standards in both creativity and quality. This process is central to Krafton’s commitment to delivering polished, high-quality games at the right time.

This would hardly be the first time that studio founders got into a messy and drawn-out fight with their parent publisher over debates about scope, timelines, and bonus payouts. The most notorious version of that was Infinity Ward leaders Vince Zampella and Jason West’s high-profile 2010 lawsuit against Activision over Call of Duty: Modern Warfare royalties. The litigation went on for two years before it was settled, filled with tons of wild revelations about everything from corporate espionage to Activision’s then-unannounced plans for the first Destiny.

We’ll see how long this lawsuit lasts and what it eventually reveals. Hopefully, Unknown Worlds’ roughly 100 employees are able to still ship a good game and get what they’re owed in the process. “As for the earnout, the idea that Max, Ted and I wanted to keep it all for ourselves is totally untrue,” Cleveland wrote in his latest update. “I’m in this industry because I love it, not for riches. Historically we’ve always shared our profits with the team and did the same when we sold the studio. You can be damned sure we’ll continue with the earnout/bonus as well. They deserve it for all their incredible work trying to get this great game into your hands.”