The ousted founders of Subnautica developer Unknown Worlds claim Krafton established a secret task force called ‘Project X’ in an effort to delay Subnautica 2 and avoid paying a multi-million dollar earnout tied to its successful early access launch.
In a pre-trial brief filed by Fortis Advisors on behalf of the Unknown World co-founders Charlie Cleveland, Max McGuire, and Ted Gill (the plaintiffs), Krafton CEO Changhan ‘CH’ Kim is accused of using any means necessary to delay the title in an effort to avoid embarrassment and potentially even save his job.
The filing is the latest development in an very public legal spat between the former Unknown Worlds executive team and the studio’s parent company, Krafton.
The former claim they were unjustly fired after Krafton chose to delay Subnautica 2 to avoid paying that aforementioned earnout, despite the project purportedly being in good shape ahead of its proposed 2025 early access launch.
Krafton, however, claims the three co-founders downed tools after it acquired Unknown Worlds and that Subnautica 2 needs more time in the oven. It also said all three execs stole information that amounted to a “blueprint” for Subnautica on their way out of the door.
“Krafton fired the Founders and delayed the launch of Subnautica 2 to avoid paying the earnout. That is what Plaintiff alleged in its complaint, and that is what the evidence will show at trial,” reads the pre-trial briefing, laying out the plaintiffs’ case. “After Krafton’s finance department, in May 2025, forecast a base-case earnout of $191 million, Krafton needed a way to ‘cancel the earn-out.'”
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Krafton is accused of initially attempting to persuade Unknown Worlds’ founders to delay Subnautica 2 based on “now-abandoned claims” the title was not ready for release. When that failed, Krafton purportedly established a secret task force dubbed ‘Project X’ with a singular mandate: either make a deal with the founders over the earnout or execute a takeover of Unknown Worlds.
Slack messages between Krafton CEO CH Kim and Unknown Worlds newly-appointed CFO Richard Yoon included in the pre-brief (and posted below) appear to show the pair discussing the prospect of a takeover.
In addition, the plaintiffs claim Kim had become frustrated with a contract that entitled Unknown Worlds’ executive and development team to major earnouts. They state Kim understood it had become a “bad deal” for Krafton that could diminish the company’s “corporate value” and result in the CEO being viewed as a “pushover.”
Related:Krafton wouldn’t have bought Subnautica studio if it had known of founder’s alleged exit strategy, says CEO
“Kim expressed his frustrations to Charlie Cleveland at a May 20 meeting in Los Angeles. He told Cleveland that paying the ‘earnout’ could cause ‘the value of the studio’ to ‘drop significantly,’ and that ‘he, as the person responsible for the investment, would have to take responsibility,'” reads the pre-brief.
“Kim later told a colleague that if Cleveland had ‘looked sorry’ when Kim told him this, he ‘wouldn’t have th[e] thought’ to take away the earnout.”
The pre-brief notes that Kim’s contract as Krafton CEO is up for renewal in 2026 and claims the situation had become “personal” for him. It also states that Kim asked ChatGPT for advice on how to avoid paying the earnout. The generative AI tool reportedly told Kim it would be “difficult to cancel” the payout.
“Not only was Krafton’s bottom line at stake; the earnout was a threat to Kim’s job. Krafton thus took action to neutralize the threat of paying the earnout,” continues the pre-brief.
After that realisation sunk in, Krafton and Kim are accused of terminating the plaintiffs by falsely accusing them of attempting to proceed with the “premature” release of Subnautica 2. The pre-brief, however, states that during the discovery phase of the legal battle, Krafton CFO and corporate designee Yoon “could not name a single Krafton employee who actually thought the game was unready for release.”
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The plaintiffs also note that, following an internal milestone review on May 27, 2025, Krafton creative director Hyeon-gyu Park agreed that Subnautica 2 should launch into early access in August 2025 as previously planned. It’s claimed he told Kim that firing Gill would “add two years to the length of the development period.”
Ultimately, the legal team representing Cleveland, McGuire, and Gill asserts that Krafton has failed to provide a clear and consistent justification as to why the trio were fired and is demanding all three be restored to their positions at Unknown Worlds.
The lawsuit brought by Fortis Advisors on behalf of the former Unknown Worlds executives is expected to be tried starting on November 17, 2025, at the Delaware Chancery Court. We have made the complete pre-brief available to view on Scribd.