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Krafton, Subnautica 2 publisher, in deep over breach of contract

Published: 17 Mar. 2026, 17:58 Updated: 17 Mar. 2026, 19:44

CHO YONG-JUN
[email protected]

A Steam product page for Subnautica 2 [SCREEN CAPTURE]

A U.S. court ruled against game giant Krafton, requiring the company to reinstate the recently ousted CEO of its acquired studio, Unknown Worlds, giving him rights to release the anticipated title Subnautica 2 as early access.

The Delaware Court of Chancery ruled Monday that Krafton’s decision to terminate CEO Ted Gil was an unlawful breach of contract, mandating his immediate return with “full operational authority” over Unknown Worlds.

The judge, however, decided not to reinstate co-founders Charlie Cleveland and Max McGuire — who Krafton claimed to have little or no input in the development — as the court agreed that the founders had voluntarily decided to not to take part in the game development process.

The ruling also extended a contractual deadline requiring the studio to hit certain sales targets to September this year.

Krafton, best known for its global hit battle royale PUBG: Battlegrounds, purchased Unknown Worlds with an initial upfront payment of $500 million. The agreement included an extra $250 million earnout, which would be paid out on the condition that the company could hit a certain revenue target by the end of last year. The former executives claimed that Krafton intentionally delayed the launch of Subnautica 2, a sequel to the 2018 hit game Subnautica, and kicked them out of the company to avoid paying the $250 million payout.

The court will decide in the second phase of the litigation whether Krafton’s actions had impaired the earnout but have acted in favor of the former executives, saying that the termination of the key employees was a breach of the purchase agreement.

Krafton, “respectfully disagreeing with the ruling,” said the company is evaluating its options.

The company, saying that it had been working hard with Unknown Worlds for an early access release of Subnautica 2, said it will focus on delivering “the best possible experience for the Subnautica community” and said it will release the newly updated version “as soon as possible for players.”

BY CHO YONG-JUN [[email protected]]