Timeline of Subnautica 2 Controversy: Lawsuits, Delays, and a $250M Showdown with Krafton
- Sagar Mankar
- Aug 13
- 3 min read
The Subnautica 2 vs Krafton controversy is one of the most heated gaming industry disputes of 2025. It involves a tangled mix of leadership shake-ups, missed release windows, and a massive $250 million bonus that’s now at the center of a lawsuit. With both sides presenting drastically different versions of events, the situation has sparked intense debate across the industry — and among fans.
The conflict escalated in July 2025, when Krafton delayed Subnautica 2 to 2026 and abruptly fired several top developers at Unknown Worlds. Those same former leaders soon responded with a lawsuit, claiming the publisher acted out of financial self-interest.
Background
At the heart of the issue is Subnautica 2, the sequel to the beloved underwater survival game developed by Unknown Worlds and published by Krafton — the South Korean giant behind PUBG. Krafton acquired Unknown Worlds back in October 2021 for $500 million, with an additional $250 million in potential bonus payouts tied to revenue goals by the end of 2025.
That bonus agreement became a key flashpoint in the current fallout. In July 2025, the situation boiled over following a leadership overhaul at Unknown Worlds, claims of project mismanagement, a delay of Subnautica 2, and public accusations of corporate greed.
Timeline of Key Events
Here’s a breakdown of the events that shaped the ongoing dispute:
Date | Event | Details |
Oct 31, 2021 | Krafton acquires Unknown Worlds | $500M upfront, plus up to $250M bonus if certain revenue targets are met by 2025. |
Sep 29, 2022 | Moonbreaker launches in Steam Early Access | Faced backlash for microtransactions (later removed); launched fully in 2024, but was later branded a "failure" by Krafton. |
Oct 17, 2024 | Subnautica 2 teaser trailer released | Announced Early Access coming in 2025 for PC and Xbox. |
Jul 2, 2025 | CEO Ted Gill, co-founder Charlie Cleveland, and CTO Max McGuire were replaced by Steve Papoutsis. Krafton says change was needed to "regain momentum." | |
Jul 4, 2025 | Charlie Cleveland responds publicly | Via Reddit and personal blog, claims Subnautica 2 is ready for Early Access. |
Jul 9, 2025 | Subnautica 2 delayed to 2026 | Bloomberg links the delay to missed bonus targets for 2025. |
Jul 10, 2025 | Krafton accuses former leadership of abandoning the project | In a statement titled "Inevitable Leadership Change Driven by Project Abandonment." Alleges 90% of the bonus was for former execs, not for the whole team. However, Cleveland denies on Reddit. |
Jul 11, 2025 | Leaked milestone review slides surface | Suggest scaled-down Early Access content. |
Jul 13, 2025 | Tells GamesIndustry.biz game needed more development. | |
Jul 15, 2025 | Bloomberg reports bonus extension + lawsuit | $25 million bonus eligibility extended to 2026 for 40 employees; former execs file lawsuit. |
Jul 16, 2025 | Legal complaint details go public | Alleges Krafton delayed the game to avoid a bonus payout. |
Jul 17, 2025 | Former leadership officially announces lawsuit | Accuses Krafton of "corporate greed" and intentional sabotage. |
Aug 1, 2025 | Krafton CEO responds during earnings report | Defends the delay, says it was "to meet gamer aspirations" and to ensure quality. |
Aug 12, 2025 | Krafton officially responds in its latest filing | Accuses Former Leads of Neglect and Self-Interest |
Key Controversies and Conflicting Narratives
There are three major areas where Krafton and the former Unknown Worlds leadership completely disagree:
1. Game Readiness vs. Delay Justification
Krafton says the game wasn’t ready, citing feedback from milestone reviews and leaks that show missing features. On the other hand, Charlie Cleveland insists the game hit all its internal milestones and was good to go for Early Access in 2025.
2. Bonus Dispute
The $250 million bonus is where things get especially messy. Krafton claims the former executives were set to receive 90% of the bonus and stopped contributing to the project. Meanwhile, the lawsuit alleges that Krafton deliberately pushed the release into 2026 to avoid triggering the payment — even though internal forecasts in April suggested they were on track.
3. Leadership Allegations
Krafton accused Cleveland of prioritizing a personal film project over Subnautica 2. The former team, however, claims they were fired without cause, which they argue violates the acquisition agreement made in 2021.
Community and Industry Reaction
The fan response has been loud and overwhelmingly in support of the former leadership. Social media is buzzing with calls to boycott Subnautica 2 and support the fired developers. Reddit threads and Twitter hashtags reflect a growing sentiment that Krafton mishandled the situation.
Some fans have even started community-driven campaigns to “stand with Unknown Worlds,” blaming corporate interests for disrupting a game they were eagerly awaiting.
Legal and Financial Implications
The legal complaint, filed on July 10, 2025, is now public and seeks damages for breach of contract and bad faith. Krafton tried to cool things off by extending bonus eligibility into 2026 for 40 employees — but that move hasn’t stopped the backlash or the lawsuit.