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The ongoing controversy surrounding Subnautica 2 developer Unknown Worlds took a dramatic turn this week as the studio’s ousted founders announced a lawsuit against publisher Krafton. They are alleging wrongful termination just as a $250 million payout loomed.

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Power Struggle Over Delayed Unknown Worlds Release

The legal battle follows the sudden dismissal of Charlie Cleveland, Max McGuire, and Ted Gill, veteran developers and leaders at Unknown Worlds, earlier this month.

Krafton, the publisher behind PUBG, claimed the founders failed to deliver a launch-ready version of Subnautica 2, prompting the delay of its Early Access release to 2026.

“Suing a multi-billion-dollar company in a painful, public and possibly protracted way was certainly not on my bucket list,” Cleveland wrote in a Reddit post. “But this needs to be made right.”

Subnautica 2, currently the second-most-wishlisted game on Steam, was originally expected to hit Early Access this year.

The delay could prove devastating for the studio's founders and developers, who were positioned to earn a $250 million “earnout” bonus if revenue targets were met post-acquisition. Unknown Worlds was sold to Krafton in 2022 for around $500 million.

Disputed Milestone Report 

Alleged leaks of an internal milestone review from May 2025 paint a conflicted picture of the game's progress.

The report, floating around online, suggests the game lacked sufficient content to “drive IP growth,” and recommended 30% more content, including new biomes, creatures, and narrative elements.

While Krafton cites this as justification for removing the leadership team, Cleveland counters that the game was ready and accused the publisher of using the delay to sidestep the $250 million payout.

Read the full coverage on Kotaku.

Founders Defend Their Record and Team

Cleveland insists the bonus was not meant solely for executives.

“The idea that Max, Ted, and I wanted to keep it all for ourselves is totally untrue,” he wrote. “We’ve always shared our profits with the team and did the same when we sold the studio… They deserve it for all their incredible work trying to get this great game into your hands.”

This echoes previous high-profile industry lawsuits, including the Infinity Ward vs. Activision battle over Call of Duty: Modern Warfare royalties in 2010, which unearthed secrets about Destiny, corporate espionage, and bonus structures.

What's Next for Unknown Worlds and Its Dev Team?

With Subnautica 2 delayed and the lawsuit underway, the roughly 100 employees at Unknown Worlds face uncertainty. Despite the leadership shakeup, fans hope the team can still deliver a compelling game—and receive the rewards they’ve worked toward.

“Subnautica has been my life’s work,” said Cleveland. “I would never willingly abandon it or the amazing team that has poured their hearts into it.”

Stay updated via r/subnautica and Kotaku.