If I had to describe the status of Subnautica 2 in just three words, it would be these: messy, messy, messy. That’s not to say the game itself is in terrible shape — this is actually a pivotal claim in the whole situation — but the relationship between Subnautica series developer Unknown Worlds and its parent company, Krafton, is in shreds. This month alone, Krafton fired the founders and CEO of Unknown Worlds, Subnautica 2 was delayed until 2026 and the ousted leaders filed a lawsuit against Krafton, looking to regain creative control of the game and the studio. At the center of the conflict is a bonus payment worth up to $250 million.
Here’s a rundown of how we got here and what in the devil is going on with Subnautica 2, Krafton and Unknown Worlds.
Krafton
Charlie Cleveland accidentally started Unknown Worlds in 2001 while building the popular Half-Life mods Natural Selection and Natural Selection 2, and technical director Max McGuire came on as an official studio co-founder in 2006. Inspired by Minecraft and burned out on mods, Unknown Worlds began working on the undersea, open-world exploration game Subnautica and released it in early access on Steam in 2014. With years of community feedback, the game evolved into a singularly tense and rich survival experience, and version 1.0 officially landed in 2018. This is also when Ted Gill joined the studio’s executive team, freeing up Cleveland to focus on creative direction. Subnautica and its spin-off, Subnautica: Below Zero, attracted millions of players and established Unknown Worlds as a successful independent team.
So, the larger studios came sniffing. PUBG publisher Krafton, which operates with billions of dollars annually, purchased Unknown Worlds in 2021 for $500 million. The acquisition came with the promise of an additional payout worth up to $250 million if Unknown Worlds hit certain performance goals by the end of 2025. This bonus is a critical piece of the chaos today.
We know more about the details of this deal thanks to recent reporting by Bloomberg . In addition to the leadership positions, which were filled by Cleveland, Gill and McGuire, Unknown Worlds had about 40 employees at the time of the Krafton sale, and they received payouts totaling $50 million at closing and over the following two years. This larger group was poised to receive as much as $25 million in the 2025 performance-based earnout, with each person expecting a different amount, but most estimating six or seven figures. The remaining $225 million was reserved for the Unknown Worlds leadership, but they said they intended to share a portion of their windfall with employees who weren’t included in the bonus, covering the full studio headcount of about 100 people.
Krafton
The leadership of Unknown Worlds repeated this promise in a lawsuit filed against Krafton on July 10, 2025. But we’re getting ahead of ourselves.
After the acquisition, Unknown Worlds continued updating Subnautica and Below Zero. In February 2024, the studio released Moonbreaker, a turn-based strategy game that never really took off, partially because of its initial microtransaction system . Since then, the studio has been focused on Subnautica 2. The game was officially announced in October 2024 with a prospective early access launch window of 2025. It’s currently the second-most wishlisted game on Steam, after Hollow Knight: Silksong.
The first public notion that something was rotten between Unknown Worlds and Krafton came on July 2, when Cleveland, Gill and McGuire were fired and replaced by former Callisto Protocol studio head Steve Papoutsis. Krafton didn’t provide a reason for the switch-up in its press release , instead offering the following nearly complete thought: “While Krafton sought to keep the Unknown Worlds’ co-founders and original creators of the Subnautica series involved in the game’s development, the company wishes them well on their next endeavors.”
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