KRAFTON Responds to Unknown Worlds Founders’ Lawsuit, Accuses Co-Founders of Abandoning Subnautica 2 Development
KRAFTON, the parent company of Subnautica 2 developer Unknown Worlds, has issued its official response to the lawsuit filed by studio co-founders Charlie Cleveland, Max McGuire, and Ted Gill, doubling down on accusations that two of the co-founders had “abandoned” their positions and negatively impacted the development team as far back as mid-2023.
The dispute began after KRAFTON terminated all three co-founders and delayed Subnautica 2 from its planned 2025 launch window into 2026. Cleveland, McGuire, and Gill, the original creators of Subnautica, filed suit against KRAFTON alleging wrongful termination and other grievances. A full overview of the events leading up to the lawsuit is available in previous reports, but the conflict has now escalated with KRAFTON’s August 12, 2025 court filing.
In the filing, KRAFTON claims that after its acquisition of Unknown Worlds, Cleveland and McGuire quickly lost interest in developing Subnautica 2, shifting focus to personal projects instead. The company alleges that Cleveland left his role as studio-wide game director and McGuire stepped away from his position as technical director, with neither continuing to contribute to game development at Unknown Worlds. Gill, who remained at the studio, is accused of prioritizing the maximization of the acquisition’s earnout payment rather than ensuring the success of the sequel.
KRAFTON also points to Cleveland’s alleged career shift toward filmmaking, a point the company has raised before, and claims this left the sequel’s development leadership in the hands of less experienced staff. According to the filing, two months before the co-founders asserted that Subnautica 2 was ready for early access, the project’s development lead estimated that the planned early access release represented about 12 percent of the intended final scope. The lead reportedly joked that at the current pace the game could take 30 years to finish.
The company further alleges that Cleveland and McGuire declined offers to return to their previous roles, with Gill reportedly stating there was no coming back to a job they did not have. The filing also cites an alleged statement from Cleveland admitting that the sequel was intended from the outset to be led by a younger generation of developers, and that he knew he was not going to be running that team from the beginning.
These claims stand in direct opposition to the lawsuit brought by the founders, which presents a very different account of the events leading to their dismissal and the game’s delay. Many of the allegations remain unverified and will ultimately be examined in court.
The legal battle is still in its early stages and could take months or even years to reach a conclusion. Whatever the result, the case is likely to offer insight into how leadership changes and corporate acquisitions affect the development of major game projects.
Do you believe this dispute will affect the quality and reception of Subnautica 2 when it finally launches?
