Nine months after Krafton gutted the leadership of Subnautica 2 studio Unknown Worlds, leading to an acrimonious legal dispute, a judge has ordered that former CEO Ted Gill be reinstated, and that control over the game’s early access release schedule be returned to him. The judge also extended the $250 million earnout period that was central to the dispute to at least September 15, 2026.
“Krafton breached the EPA [Equity Purchase Agreement] by terminating the key employees without valid cause and by improperly seizing operational control of Unknown Worlds,” the ruling states (via Kotaku).
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The judge acknowledged that putting Gill in charge of Unknown Worlds again, and returning control of Subnautica 2, “will cause tension with the parent company given the obvious bad blood between the parties.” But that, he continued, “does not excuse a material breach of contract” or override the performance clause agreed to by both parties, and that both Unknown Worlds and Krafton “can—and must—act in good faith to navigate their remaining contractual relationship.”
Lest there be any ambiguity, the judge declared very clearly that he found that Krafton terminated the Unknown Worlds studio heads specifically to avoid paying out that $250 million bonus that would have been required if Subnautica 2 achieved specific sales targets following its early access launch—essentially agreeing with the central point of argument of the former Unknown Worlds heads.
“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.’ 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.
“While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward,” Krafton said in a statement provided to PC Gamer. “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.”
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