Unknown Worlds Founders Accuse Krafton of Defying Court Order With Subnautica 2 Release Announcement

The legal dispute between Krafton and the founders of Unknown Worlds has taken a fresh turn, this time over how the early access release date for Subnautica 2 was announced to the public.

To catch up on the background: Ted Gill, Charlie Cleveland, and Max McGuire, the co-founders of Unknown Worlds, were fired by publisher Krafton back in 2025. They sued almost immediately, claiming Krafton terminated them specifically to avoid paying out up to $250 million in performance-based bonuses tied to Subnautica 2's early access launch.

After months of legal back and forth, Delaware's Court of Chancery recently ruled in their favor. Vice Chancellor Lori Will found that Krafton had indeed breached its contract with the executive team and ordered the reinstatement of Ted Gill as CEO, along with restoring his authority over the game's early access release.

That ruling came on Monday, March 16, 2026. The very next day, things got complicated again.

According to Game File, Steve Papoutsis, the executive Krafton had placed in charge of Unknown Worlds following the 2025 firings, sent an internal memo to studio staff. In it, he stated that Subnautica 2 had passed a key development milestone and that the game "is ready for Early Access release in May." IGN reported on the memo that same day, and Krafton went on to confirm the May window to other outlets, including Gaming Amigos.

The problem, as the founders' legal team sees it, is not necessarily the May date itself. It is how and when that announcement was made. Gill had technically been reinstated as CEO as of 9 am ET on March 16, meaning Papoutsis no longer held that authority when the memo went out.

Their lawyers fired off a letter to Vice Chancellor Will expressing serious concerns. "Krafton self-servingly announced the launch without any regard to its impact on the game, the team, or the community, let alone this Court's Opinion," the letter read.

They went further, adding, "That entire process was supposed to be driven by Mr. Gill. However, in defiance of the Court's Opinion, Krafton has now taken that away, further damaging the game and sowing additional confusion among the Subnautica community."

The lawyers also speculated that Krafton had "intentionally leaked" the Papoutsis memo before pushing out official confirmations to multiple media outlets.

Krafton, unsurprisingly, pushed back. In their own letter to the court, their lawyers argued that the memo was simply an internal message of appreciation.

"Papoutsis's message was simply celebrating the UW employees' efforts toward a past event: Krafton's pre-Opinion determination that Subnautica 2 was ready for Early Access release. There was nothing improper about conveying the results of the milestone review or thanking the development team for their dedication and talent."

They also maintained that Gill's authority had not been compromised, stating, "In his role as CEO, Gill will be able to assess independently his views on the state of Subnautica 2 and the appropriate release schedule; nothing in Papoutsis's message alters Gill's authority or discretion."

But Gill's team sees a real practical problem here. As per the motion filed by the founders' lawyers, Krafton announced and confirmed the May date before Gill even had a chance to review the current state of the game. They pointed out that Gill "must deal with publishing agreements, launch advertising planning, and other back-end issues" and that "he now needs to do so with the axe of fan disappointment hanging over his head if he changes the launch timing."

Gill's lawyers have since filed a motion asking the judge to force Krafton to explain why they should not be sanctioned for their actions. They also reserved the right to seek reimbursement of legal fees. Meanwhile, Krafton filed a separate motion disputing when exactly Will's ruling came into effect, arguing it should not apply until a formal implementing order is signed.

Vice Chancellor Will has not yet responded to either letter. Both parties were previously ordered to confer and submit a proposed judgment in line with her ruling.