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Krafton-Unknown Worlds fight turns 'nasty' after U.S. exec insults revealed

Published: 04 Dec. 2025, 18:42

CHO YONG-JUN
[email protected]

A promotional image for Unknown Worlds' upcoming game Subnautica 2 [KRAFTON]

An ongoing legal battle between Korean game publisher Krafton and former executives from Unknown Worlds, a San Francisco-based video game developer Krafton acquired in 2021, has intensified after it was revealed that the Unknown Worlds executives allegedly made highly derogatory comments about Korea.

Krafton, best known for its PUBG: Battlegrounds battle royale game, has been in a protracted dispute with former Unknown Worlds executives Charlie Cleveland, Max McGuire and Ted Gill after they sued the Korean publisher in August following their terminations in July. The three developers allege Krafton intentionally delayed the launch of Unknown Worlds' sequel to their 2018 hit game Subnautica and removed the executives from their positions so that Krafton would not have to pay a $250 million bonus promised if the company hit certain revenue targets by the end of 2025.

In a document written by Cleveland and submitted to a chancery court in the United States, the former executive had allegedly mapped out his legal battle with Krafton by planning to leverage negative perceptions of Korea. He also planned to eventually have Krafton CEO Kim Chang-han step down from his position. The document was revealed in late November.

“Korea — they are the Joe Pesci of countries,” read the document titled Litigation Help, submitted to the Delaware Chancery Court. “Charming until they’re incredible nasty. It goes to 11 quickly. No filter.”

“It’s small and nasty,” the memo continues. “Delaware will say this is a bunch of sadistic Korean assholes.”

Unknown Worlds co-founder Cleveland admitted in court on Nov. 19 that he had written the notes, but claimed that the memo was merely a transcription of advice given by Owen Mahoney, who was CEO and president of Nexon, one of Korea's largest game publishers, from 2014 to 2024.

Krafton, conversely, alleges that the sequel game, Subnautica 2, was not ready even for early release and therefore a delay in launching it was required. The company also showed evidence that McGuire and Cleveland had no role in the development of Subnautica 2, and claims that the memo, written prior to Krafton’s decision to kick them out of the company, proves that the executives intended to pick a fight with Krafton.

“We were forced to make a change when the former leaders showed little interest in the development of Subnautica 2, which has always been our top priority,” the game publisher said.

The three former Unknown Worlds executives, in return, claim that the termination was systematically planned out by Krafton to avoid the $250 million bonus, citing evidence that Krafton CEO Kim Chang-han had used ChatGPT to consult whether he could avoid giving the payouts to the developer.

“Just like everyone else, I am using ChatGPT to get faster answers or responses,” Chang testified in court in November, admitting he used ChatGPT to “figure out what kind of rights” he had. The ChatGPT log was deleted by Kim.

Subnautica, an action-adventure survival game developed by Unknown Worlds, launched as early access in 2014 and had its official release in 2018. The game won the Golden Joystick Awards’ PC Game of the Year upon its release and had sold over 5.23 million copies by January 2020. The mobile version of the game was released on iOS and Android in July this year, but the sequel, Subnautica 2, is still yet to be released, with the delayed early access launch now slated for 2026.

BY CHO YONG-JUN [[email protected]]