Subnautica 2 Creator Sues Krafton Amidst Development Turmoil

Legal Battle Erupts Over Alleged Mismanagement and Abandonment of Highly Anticipated Title

Former Unknown Worlds Entertainment leader Charlie Cleveland has initiated legal proceedings against Krafton, vehemently refuting accusations of financial impropriety and project abandonment concerning the upcoming survival game, Subnautica 2. The lawsuit promises to reveal internal conflicts and a fight for the studio’s reputation.

Lawsuit Details Emerge

Charlie Cleveland has shared the contents of his lawsuit against Krafton, painting a different picture of the circumstances surrounding Subnautica 2’s development. The legal documents suggest the game was initially slated for an early access debut in October 2025, a timeline now uncertain.

Bonus Structure Under Scrutiny

Reporting indicates Krafton intends to extend potential bonuses for Unknown Worlds developers, a move following the delay of Subnautica 2’s early access release. It’s revealed that a substantial portion of a $250 million bonus pool, originally discussed for approximately 100 employees, was allocated to management, including Ted Gillem, Charlie Cleveland, and Max McGuire.

While $225 million was designated for the management trio, approximately 40 developers employed at the time of the contract were to receive the remaining $25 million in bonuses over two years. This financial restructuring has become a focal point in the dispute.

Internal Assessment Leaks Surface

Screenshots of an internal assessment detailing Subnautica 2’s development have surfaced online, with Krafton confirming their authenticity. The leaked materials, reportedly from a May 2025 internal presentation, highlight concerns over the game’s “freshness and volumes” and note the absence of several planned features, including two biomes, a new creature, a vehicle, a game mode, and a story thread.

While these leaks may appear to corroborate Krafton’s version of events, the dynamic nature of game development timelines means that a two-year schedule could naturally evolve. Furthermore, as an early access title, Subnautica 2 is expected to launch with some elements missing from its final release.

Cleveland Denies Wrongdoing

Charlie Cleveland has categorically denied claims that he and his colleagues pocketed funds and abandoned the Subnautica 2 project. He stated, I am in this industry because I love her, not for wealth. In the past, we always shared profits with the team and did the same when we sold the studio. You can be sure that it will be the same with Earn-out. [Developers from Unknown Worlds – ed.] They deserve this thanks to their amazing work, thanks to which this wonderful game has hit you.

Past Leadership Ouster and Fan Backlash

The current conflict stems from the recent removal of Ted Gill, Charlie Cleveland, and Max McGuire from leadership roles at Unknown Worlds. Their departure, with Steve Papoutsis taking over, sparked significant fan anxiety about the future of Subnautica 2. Despite Cleveland‘s assurances that the game was ready for early access, the title was reportedly postponed to 2026, reportedly against the former leadership’s wishes.

Krafton cited a need to expand the game’s content for the delay, but unofficial reports suggest financial motivations. Media outlets reported that Krafton had pledged $250 million to the Subnautica creators if specific revenue targets were met by the end of 2025. The delay to 2026 jeopardizes this payout, leading fans to call for boycotts, accusing Krafton of deliberately undermining the developers.

Responding to mounting criticism, Krafton highlighted its $500 million investment in acquiring Unknown Worlds and reiterated that the $250 million bonus was contingent on sales performance. The company asserted that approximately $225 million of this pool was allocated to Gill, Cleveland, and McGuire, who were expected to remain actively involved in Subnautica 2’s development, suggesting the trio accepted the funds and then disengaged from the project.

The ongoing legal battle is expected to shed light on the transaction’s intricacies and assign responsibility for the controversial decisions impacting the Subnautica sequel.