The already complicated development of Subnautica 2 has taken a dramatic turn, escalating into a bitter legal confrontation.
Developer Unknown Worlds’ recently ousted leaders have announced they are suing publisher Krafton. This decisive action follows a stunning corporate statement from Krafton, which publicly accused the former employees of “abandoning” the highly anticipated underwater survival sequel. The entire saga has evolved from a major personnel shake-up into a full-blown courtroom dispute, revealing deep tensions between the creators and the publisher.
The conflict first came to light last week when Krafton announced it was replacing three key figures at Unknown Worlds, including studio founder and Subnautica director Charlie Cleveland.
If you missed the saga, you can watch it to this.
His replacement was Steve Papoutsis, CEO of The Callisto Protocol studio Striking Distance. Fan reaction was immediate and negative, driven by concerns over Krafton’s emphasis on “metrics and targets” and fears that the publisher was rushing the game. Despite Krafton’s assurances that it wanted to keep the original creators involved, a Bloomberg report suggested the leaders were actually “pushed out” following major disagreements.
The core of the dispute reportedly centers on the game’s timeline and financial incentives. The Bloomberg report claimed that Cleveland and his colleagues—CEO Ted Gill and special projects director Max McGuire—were forced out because they opposed delaying Subnautica 2‘s Early Access launch from 2025 to 2026. This delay, the report noted, threatened a significant $250 million bonus payout promised to the development team. While Krafton insisted the delay was for quality, Cleveland countered that the game was already “ready” for Early Access.
Krafton’s response to the situation was anything but subtle. The publisher issued a harsh statement accusing the former leaders of “abandoning [their] responsibilities” and delaying the project. Krafton alleged that Cleveland prioritized a “personal film project” over Subnautica 2 development, especially after the poor performance of Moonbreaker. The publisher claimed this lack of focus caused “repeated confusion in direction” and delays resulting in an early access version that “falls short.” Krafton also alleged that 90% of the $250 million bonus would have gone to the three ousted leaders.
In response, Cleveland announced the lawsuit, describing the situation as “explosive and surreal.” He fiercely denied Krafton’s accusation, emphasizing that Subnautica has been his “life’s work” and that he would “never willingly abandon it.” Furthermore, he refuted the notion that he, Gill, and McGuire intended to hoard the bonus, stressing that they always share profits with the team. As the legal battle looms, Subnautica 2 remains slated for a 2026 Early Access launch, assuming the project can navigate the turbulent waters of the pending lawsuit.