In July 2025, three developers on survival game Subnautica 2 sued Krafton, the owner of their studio Unknown Worlds, claiming Krafton had intentionally delayed the game’s early access release to avoid giving them a $250 million payout. Krafton fired back with the claim that the developers had abandoned the project and stolen data. On Monday, a Delaware Chancery Court vice chancellor ruled that Krafton must rehire one of the developers, Ted Gill, and extend the deadline for the payout.
Unknown Worlds co-founders Charlie Cleveland and Max McGuire had taken on limited roles at the studio prior to their termination, which Krafton argued could justify terminating them for cause. The suit, which Kotaku was first to report, also alleged that they downloaded large amounts of data from the company when they suspected they would be fired. Krafton said in its August response to the lawsuit that the three Unknown Worlds developers sued the South Korean company "to demand a multimillion-dollar payday they haven't earned."
Vice Chancellor Lori Will wrote in her decision that the executives' actions do not "[constitute] an intentional act of dishonesty," and that the "role changes were transparent maneuvers rather than deliberate acts of deception." The data downloads, she said, "were protective measures, lacking the requisite intent to deceive."
The decision comes after a three day trial held from Nov. 17 to 19, followed by oral arguments on Jan. 9, after a "post-trial briefing."
Over the course of Subnautica 2’s development, Cleveland stepped back into the role of “Franchise Creative Director,” working on a film version of Subnautica and other projects. McGuire became “Special Projects Director,” which the vice chancellor described as focusing on “social impact,” including “researching the effect of video games on children with autism.” Both roles had reduced hours, but the vice chancellor wrote that the founders “transparently communicated their transition away from their original roles publicly, internally, and directly to Krafton’s senior personnel,” with Gill being aware and keeping Krafton appraised. The vice chancellor also noted that McGuire and Cleveland “each voluntarily reduced their salaries from nearly $400,000 to $100,000 to reflect their reduced operational roles.”
Gill continued to work as CEO, overseeing “budgeting, managed personnel, and dri[ving] business development—all while serving as the primary liaison to an increasingly hostile parent company. Krafton’s executives levied no complaints about his dedication or performance, and internal Krafton communications even explored keeping Gill while ousting the others. He was, by all accounts, a highly effective executive," according to the vice chancellor's recounting of the events.
Krafton accused the executives in a September 2025 filing of stealing "hundreds of thousands" of documents related to Unknown Worlds and Krafton. It said Gill, specifically, went on a "two-day export of a full copy of his Unknown Worlds Google Drive and email, including volumes of confidential company materials." Gill, for his part, said he was "backing up a few things." A forensic data analyst hired by Krafton to support its claims said the employees downloaded tons of stuff, including 3D models and other data, which "essentially amounts to a blueprint for Subnautica." The company said the executives threatened to publish Subnautica 2 themselves, and that the stolen documents were "presumably in furtherance of their plan to unilaterally self-publish Subnautica 2 and capitalize on the earnout."
The vice chancellor found that rather than intending to deceive Krafton or use the data for their personal gain, that they were "misguided, but driven by a good faith, defensive motive." She said that the employees "did not loot the company to enrich themselves, steal data to form a competing venture, or sell secrets to a rival," keeping the data confidential and later returning some. "These are not the actions of thieves," the vice chancellor wrote.
Given Cleveland and McGuire’s reduced roles before the termination, the vice chancellor declined to reinstate them. Gill, however, must be “reinstated as CEO of Unknown Worlds with full operational authority over the studio," the vice chancellor wrote. She also ruled that Gill—"with his authority restored"—can “proceed with the early access release of Subnautica 2 when he deems it appropriate.”
"Subnautica 2 was on track for its intended early access release under Gill’s leadership," the vice chancellor wrote. "Restoring his position and operational control will allow the studio to launch its highly anticipated game using the community-driven development model that made it successful.”
The vice chancellor also declared that the deadline for the payout, contingent on Subnautica 2’s early access release, must be moved to encompass the time that passed during Gill’s ouster. The deadline was initially set to expire in December 2025, but must now be extended for the 258 days Gill wasn’t employed, moving to September 15, 2026. The founders have the option to extend it another six months, to March 2027, by notifying Krafton in writing.
“When an employer faces a contractual payout it wishes to avoid, it is heavily ‘incent[ivized] to go rummaging through the employee’s history to find any reason it can to announce that the termination was really for cause,’” the vice chancellor wrote. “That is precisely what happened here. Frustrated by the Key Employees’ refusal to forfeit operational control and facing a nine-figure liability, Krafton went searching for a pretext.”
The suit also reiterates how Krafton CEO Changhan Kim frequently turned to ChatGPT for advice on how to deal with the situation. At ChatGPT’s suggestion, Kim formed an internal task force called Project X to negotiate a deal on the payout or take over Unknown Worlds. ChatGPT drafted a series of responses, and the suit reads that “Krafton followed most of ChatGPT’s recommendations.”
Today’s ruling doesn’t settle issues of monetary damages regarding the payout, which is part of “phase 2” of the lawsuit.
In a statement to Aftermath, Krafton wrote that
Krafton puts players at the heart of every decision, and that will never change. Over the past several months, Krafton and the Unknown Worlds team have worked tirelessly to strengthen the game and prepare it for an Early Access release, with a continued focus on delivering the best possible experience for the Subnautica community. We look forward to pushing out the newly updated version as soon as possible for players.
While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward. Today’s ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, Krafton's immediate focus remains unchanged: delivering the best possible game to Subnautica’s fans.
Aftermath has reached out to lawyers for the three developers for comment.
