'Subnautica' Developers File Lawsuit Against Krafton After They Were Fired

The original development team for Subnautica has filed a lawsuit against Krafton after they were fired earlier this month.

On July 10th, Charlie Cleveland, one of the original founders of Unknown Worlds, the developer of Subnautica, announced that he Max McGuire, and Ted Gill have filed a lawsuit. Cleveland posted on X, “We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public - you all deserve the full story. 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.”

Additionally, Cleveland addressed claims that he and the leadership planned to hoard a potential bonus if the company hit revenue goals. He shared, “As for the earnout, the idea that Max, Ted and I wanted to keep it all for ourselves is totally untrue. 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.”

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As noted above, the lawsuit comes in the wake of Krafton, who purchased Unknown Worlds in 2021 firing Gill, Cleveland, and McGuire. The company announced in a blog post at the beginning of the month that it had hired Steve Papoutsis as its new CEO and that he was replacing Gill, Cleveland, and McGuire “effective immediately.”

Krafton added, “While KRAFTON sought to keep the Unknown Worlds’ co-founders and original creators of the Subnautica series involved in the game’s development, the company wishes them well on their next endeavors.”

It was unclear why Gill, Cleveland, and McGuire had been replaced albeit Krafton hinted that it might have to do with a new review policy it was instituting. The company wrote, “As part of its oversight, KRAFTON is committed to achieving regular milestones to assess progress across its creative studios. These reviews, based on clearly defined metrics and targets, will help ensure that games meet both creative and quality standards. This process is essential to delivering the right game at the right time. Unknown Worlds’ new leadership fully supports this process and is committed to meeting player expectations.”

Cleveland initially responded to being fired two days later writing in a lengthy post on X, “So you can see why for Max, Ted, myself, the Unknown Worlds team, and for our community, the events of this week have been quite a shock. We know that the game is ready for early access release and we know you’re ready to play it. And while we thought this was going to be our decision to make, at least for now, that decision is in Krafton’s hands. And after all these years, to find that I’m no longer able to work at the company I started stings.”

A week after canning its leadership team and just five days after Cleveland shared the game was ready for early access Krafton announced it was delaying the game’s Early Access release on Steam to 2026. . The developer shared that after a series of playtests it discovered there were “a few areas where we needed to improve before launching the first version Subnautica 2 to the world. Our community is at the heart of how we develop, so we want to give ourselves a little extra time to respond to more of that feedback before releasing the game into Early Access. With that in mind, we’ve made the decision to delay Subnautica 2’s Early Access release to 2026.”

Additionally, Unknown Worlds added, “Now that Subnautica 2 is coming out in 2026, we’ll be able to add more biomes, more vehicle upgrades, additional tools, expand on our story, and include more creatures to discover.”

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Next, a report from Jason Schreier at Bloomberg claimed the delay was not necessarily to add the aforementioned features, but because Krafton wanted to avoid paying a $250 million bonus to the development team.

Schreier claimed, “The sequel’s delay was against the wishes of the studio’s former leadership, according to the people. The $250 million bonus was due to kick in if Unknown Worlds hit certain revenue targets by the end of 2025, according to the purchase agreement, which was reviewed by Bloomberg. By delaying Subnautica 2 into next year, the company is unlikely to hit those targets and therefore the employees may not be eligible for the payout, the people said.”

A day after the game was delayed, Krafton claimed in a statement to Insider Gaming that Cleveland, McGuire, and Gill “abandoned the responsibilities entrusted to them, leading to their dismissal.”

The company stated, “KRAFTON made multiple requests to Charlie and Max to resume their roles as Game Director and Technical Director, respectively, but both declined to do so. In particular, following the failure of Moonbreaker, KRAFTON asked Charlie to devote himself to the development of Subnautica 2. However, instead of participating in the game development, he chose to focus on a personal film project.”

The company then charged that “the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule.”

As for the alleged $250 million bonus, Krafton confirmed it is real but according to Insider Gaming 90% of it was dedicated to the three fired executives and it was set “with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.”

Additionally, the company stated, “We believe that the dedication and effort of this team are at the very heart of Subnautica’s ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised.”

Following Cleveland, Gill, and McGuire’s lawsuit, Jason Schreier reports that Krafton has extended “the schedule for a potential bonus payout” due to the delay of Subnautica 2.

What do you make of Cleveland, Gill, and McGuire filing a lawsuit?

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