Krafton, the multibillion-dollar publishing studio, recently made headlines by announcing a surprise change in leadership at Unknown Worlds, the developers behindSubnautica, citing a lack of focus on the development ofSubnautica 2as the core reason behind the abrupt dismissals. Krafton acquired Unknown Worlds back in 2021, with the initial promise of releasingSubnautica 2in early access by 2024. Since then, however, the game has seen several delays.
Krafton Fires Unknown Worlds Co-Founders, Delaying Subnautica 2 to 2026
Krafton Replaces Unknown World Leadership Without Warning
On July 2,Krafton announced Unknown Worlds co-founders were being fired"effective immediately." The three executives, Tedd Gill, Charlie Cleveland, and Max McGuire, were replaced by Steve Papoutsis as CEO, best known for his work onTheCallisto Protocol. Initially, Krafton did not provide a reason for the termination beyond hinting at a “faster development cycle” under Papoutsis. Unknown Worlds also released a statement of their own, assuring players that while the leadership may have changed, the core development team actually working onSubnautica 2remains the same.
Charlie Cleveland Publishes Response to Surprise Termination
Shortly after the news broke,Charlie Cleveland published a blog post in response to Krafton’s actions, detailing his long career in the game development world and how much of a shock it was to him when he was disallowed from working on a title he had spent 20 years building. Crucially, he stated that the “game is ready for early access,” stating that if the decision had been left up to Unknown Worlds' former leadership,Subnautica 2would’ve been released in early access sometime during 2025, as originally planned.
The situation further escalated when Bloomberg’s Jason Schreier reported that Krafton had promised a $250 million earn-out to Unknown Worlds if the studio was able to hit certain revenue targets by 2025. Most of that sum would reportedly have gone to the three co-founders, the same individuals fired just before the game’s early access release window. Compounding the controversy, it was also revealed thatKrafton had delayedSubnautica 2to 2026, effectively ensuring that the bonus conditions could no longer be met.
Krafton Accuses Former Unknown Worlds Executives of Negligence
In response to mounting backlash,Krafton released another statementconfirming the existence of the $250 million earn-out deal. Notably, it was revealed that 90% of this payout was to be handed to the three executives at the center of this controversy. However, Krafton insisted that financial concerns had nothing whatsoever to do with the termination. Instead, the company accused Cleveland, Gill, and McGuire of failing to fulfill their responsibilities, specifically calling out Charlie Cleveland for prioritizing a personal film project overSubnautica 2. Krafton also expressed that the reason for the delay to 2026 was because, in its current state, the game “falls short in terms of content volume,” a statement that directly contradicted Cleveland’s earlier claims that the game was ready for release in 2025.
Unknown Worlds Co-Founders File Lawsuit Against Krafton
In retaliation, Cleveland published another blog post announcing that the former Unknown Worlds co-founders were preparing to file alawsuit against Krafton. While the exact nature of the lawsuit remains unclear, most signs point to defamation or unlawful termination claims. Cleveland, who has become an informal spokesperson for the fired executives, has indicated that this will be a public, protracted battle in court.
Subnautica 2 Fans Are Torn Over Whom to Trust
The initial community reaction has been overwhelmingly in favor of Unknown Worlds' former leadership. Many fans believe Krafton’s decision to terminate the co-founders just before the early access launch was a calculated move to avoid a massive payout. Others, however, are taking the wait-and-see approach, as the extremely direct, accusatory nature of Krafton’s statement hasn’t received an adequate rebuttal from the opposing side. Additionally, a leaked development document recently surfaced on Reddit from unverified sources, which points toSubnautica 2being in an unfinished state, further complicating matters. If true, this would lend a lot of credence to Krafton’s version of events. As the lawsuit proceeds, more facts surrounding this controversy are expected to surface, potentially offering fans a clearer picture of what’s happening behind the scenes ofSubnautica 2’stroubled development.
