What the hell is happening with Subnautica 2?

If I needed to describe the standing of Subnautica 2 in simply three phrases, it might be these: messy, messy, messy. That’s to not say the sport itself is in horrible form — that is really a pivotal declare in the entire state of affairs — however the relationship between Subnautica sequence developer Unknown Worlds and its mother or father firm, Krafton, is in shreds. This month alone, Krafton fired the founders and CEO of Unknown Worlds, Subnautica 2 was delayed till 2026 and the ousted leaders filed a lawsuit towards Krafton, trying to regain artistic management of the sport and the studio. On the heart of the battle is a bonus cost value as much as $250 million.

Right here’s a rundown of how we bought right here and what within the satan is happening with Subnautica 2, Krafton and Unknown Worlds.

Charlie Cleveland by accident began Unknown Worlds in 2001 whereas constructing the favored Half-Life mods Pure Choice and Pure Choice 2, and technical director Max McGuire got here on as an official studio co-founder in 2006. Impressed by Minecraft and burned out on mods, Unknown Worlds started engaged on the undersea, open-world exploration sport Subnautica and launched it in early entry on Steam in 2014. With years of group suggestions, the sport developed right into a singularly tense and wealthy survival expertise, and model 1.0 formally landed in 2018. That is additionally when Ted Gill joined the studio’s government crew, releasing up Cleveland to concentrate on artistic route. Subnautica and its spin-off, Subnautica: Beneath Zero, attracted tens of millions of gamers and established Unknown Worlds as a profitable unbiased crew.

So, the bigger studios got here sniffing. PUBG writer Krafton, which operates with billions of {dollars} yearly, bought Unknown Worlds in 2021 for $500 million. The acquisition got here with the promise of a further payout value as much as $250 million if Unknown Worlds hit sure efficiency targets by the tip of 2025. This bonus is a crucial piece of the chaos right now.

We all know extra concerning the particulars of this deal because of latest reporting by . Along with the management positions, which have been stuffed by Cleveland, Gill and McGuire, Unknown Worlds had about 40 workers on the time of the Krafton sale, they usually acquired payouts totaling $50 million at closing and over the next two years. This bigger group was poised to obtain as a lot as $25 million within the 2025 performance-based earnout, with every particular person anticipating a distinct quantity, however most estimating six or seven figures. The remaining $225 million was reserved for the Unknown Worlds management, however they stated they supposed to share a portion of their windfall with workers who weren’t included within the bonus, masking the total studio headcount of about 100 individuals.

The management of Unknown Worlds repeated this promise in a lawsuit filed towards Krafton on July 10, 2025. However we’re getting forward of ourselves.

After the acquisition, Unknown Worlds continued updating Subnautica and Beneath Zero. In February 2024, the studio launched Moonbreaker, a turn-based technique sport that by no means actually took off, partially due to its . Since then, the studio has been centered on Subnautica 2. The sport was with a potential early entry launch window of 2025. It’s presently the second-most wishlisted sport on Steam, after Hole Knight: Silksong.

The primary public notion that one thing was rotten between Unknown Worlds and Krafton got here on July 2, when Cleveland, Gill and McGuire have been fired and changed by former Callisto Protocol studio head Steve Papoutsis. Krafton didn’t present a motive for the switch-up , as an alternative providing the next almost full thought: “Whereas Krafton sought to maintain the Unknown Worlds’ co-founders and authentic creators of the Subnautica sequence concerned within the sport’s growth, the corporate needs them nicely on their subsequent endeavors.”

Krafton didn’t point out delaying the early entry launch at the moment, however it applied a overview course of that it stated can be “important to delivering the proper sport on the proper time.” The writer prompt the ousted leaders had been uncooperative on this facet.

“Unknown Worlds’ new management absolutely helps this course of and is dedicated to assembly participant expectations,” its press launch stated.

Cleveland printed on July 4 reflecting on his time in sport growth, and sharing his disappointment at Krafton’s dealing with of Unknown Worlds and Subnautica 2. He additionally referenced Krafton’s intent to delay the launch.

“You may see why for Max, Ted, myself, the Unknown Worlds crew, and for our group, the occasions of this week have been fairly a shock,” Cleveland wrote. “We all know that the sport is prepared for early entry launch and we all know you’re able to play it. And whereas we thought this was going to be our determination to make, no less than for now, that call is in Krafton’s palms. And in spite of everything these years, to seek out that I’m not capable of work on the firm I began stings.”

On July 9, Krafton formally of Subnautica 2 to 2026. That very same day, Bloomberg printed a report outlining the performance-based bonus settlement and implicitly questioning how the timing of the delay would make it troublesome for the studio to hit its targets, placing the payout in jeopardy. This was the primary time the small print of the bonus turned public.

Krafton with Engadget — and in a pop-up on — on July 10 that straight-up accused the fired leaders of abandoning the studio in favor of private artistic pursuits, particularly calling out Cleveland’s . It additionally threw shade at Moonbreaker and claimed the previous bosses needed the bonus cost “for themselves.”

“Krafton made a number of requests to Charlie and Max to renew their roles as Recreation Director and Technical Director, respectively, however each declined to take action,” the assertion stated. “Specifically, following the failure of Moonbreaker, Krafton requested Charlie to commit himself to the event of Subnautica 2. Nevertheless, as an alternative of taking part within the sport growth, he selected to concentrate on a private movie mission. Krafton believes that the absence of core management has resulted in repeated confusion in route and vital delays within the total mission schedule. The present Early Entry model additionally falls brief when it comes to content material quantity.”

That very same day, Cleveland introduced that he and the opposite ousted studio heads had towards Krafton.

“Suing a multibillion greenback firm in a painful, public and presumably protracted approach was definitely not on my bucket listing,” Cleveland wrote. “However this must be made proper. Subnautica has been my life’s work and I’d by no means willingly abandon it or the wonderful crew that has poured their hearts into it. As for the earnout, the concept that Max, Ted and I needed to maintain all of it for ourselves is completely unfaithful.”

The lawsuit wasn’t unsealed till July 16. However on July 15, reported that Krafton now deliberate to increase the window for the bonus cost by a further 12 months, giving the studio extra time to hit its targets. The writer may also reportedly advance a portion of a separate profit-sharing bonus pool to all Unknown Worlds workers in 2025.

These strikes appear designed to moot the core points raised within the breach of contract grievance that Cleveland and different Unknown Worlds leaders filed towards Krafton in Delaware Chancery Court docket. The lawsuit, unsealed on July 16, claims Krafton illegally fired the studio heads and delayed Subnautica 2 with a purpose to keep away from the bonus funds. It additionally supplies a timeline of rising tensions between the founders and Krafton this 12 months, accusing the writer of intentional sabotage.

The lawsuit claims that Krafton and Unknown Worlds had a respectful relationship till April 2025, when Gill introduced Krafton executives with the studio’s constructive income projections, which have been made with the belief that Subnautica 2 would hit early entry in 2025. He additionally outlined the anticipated bonus payout underneath the settlement.

“When that occurred, every little thing modified,” the lawsuit reads.

The grievance alleges that at this level, Krafton started searching for methods to power out the leaders of Unknown Worlds and delay the launch of Subnautica 2, with a purpose of circumventing the bonus cost. Cleveland, Gill and McGuire argued backwards and forwards with Krafton executives over whether or not the sport was prepared for early entry, and Krafton finally pulled all of its assets from the studio. Krafton issued a cease order on Subnautica 2 growth, took over Unknown Worlds’ communications channels and in June it began laying an inside paper path accusing the founders of abandoning their fiduciary duties, in accordance with the grievance.

Cleveland, Gill and McGuire have been fired and faraway from the Unknown Worlds board of administrators on July 1. That is the place the remainder of us entered the story.

The primary battle right here is over whether or not Subnautica 2 is admittedly prepared for an early entry launch, and that issues due to a possible $250 million bonus cost that’s jeopardized by a delay. Not solely is that this a big sum for Krafton to lose, however it’s additionally an enormous sum of money for Cleveland, Gill and McGuire to overlook out on, particularly now that they’ve misplaced their studio and tentpole IP. The ousted leaders reiterated of their lawsuit that they “deliberate to share much more of the earnout with their devoted crew” than they have been contractually obligated to. Within the grievance, they’re searching for Krafton to pay out the total bonus as projected and not using a delay, fulfill its obligations as a writer and reinstate them because the heads of Unknown Worlds.

Each celebration on this state of affairs claims they need what’s greatest for Subnautica 2 and its gamers. It’s doable that they’re all telling the reality and this can be a easy disagreement over inventive integrity. It’s additionally doable that they’re all mendacity and everyone seems to be trying to make (or maintain) a fast buck — however man, that’s bleak. The reality, as typical, doubtless lies someplace in between and, chances are high, we’ll by no means understand it. At the very least the courtroom system will finally be capable of decide the second-best factor, which is who’s at fault.

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