More Subnautica 2 legal trouble brewing amid claims Krafton "intentionally leaked" May release without consulting reinstated CEO

More Subnautica 2 legal trouble brewing amid claims Krafton
By: Euro Gamer Posted On: March 20, 2026 View: 2

Lawyers for Subnautica 2 developer Unknown Worlds' newly reinstated CEO Ted Gill are reportedly pushing for Krafton to be found in contempt of a recent court ruling after the publisher confirmed a May early access release for the highly anticipated underwater survival sequel without consulting Gill.

Krafton - which acquired Unknown Worlds in 2001 - removed Gill from his position at Unknown Worlds last summer, in a move that also saw the departure of studio founder and Subnautica game director Charlie Cleveland, and special projects director Max McGuire. Steve Papoutsis, CEO at Krafton's The Callisto Protocol studio Striking Distance, replaced the outgoing leadership team. Shortly after, Gill, Cleveland, and McGuire entered into an acrimonious legal battle with the publisher, claiming they were deliberately pushed out, and that the game was intentionally delayed so Krafton could avoid paying the team a hefty $250m bonus package.

As the case continued, it was alleged Krafton's CEO had asked ChatGPT to "brainstorm ways to avoid paying" the bonus, and earlier this week a Delaware judge delivered the bombshell verdict Krafton had breached its Equity Purchase Agreement with Unknown Worlds by "terminating the Key Employees without valid Cause and by improperly seizing operational control of [the studio]." As a result, the board resolution that saw Gill and his co-developers fired was declared "ineffective", and Krafton was ordered to reinstate Gill, giving him "full operating authority" of Unknown Worlds and of Subnautica 2's Early Access release.

It's that latter part that's key to the latest twist in the saga. A day after the ruling was announced, IGN reported Gill's earlier replacement, Papoutsis, shared a memo with staff announcing Subnautica 2 had passed a key development milestone and so was "ready for Early Access release in May". Krafton subsequently confirmed Papoutsis' release announcement with a number of publications. Unsurprisingly, as reported by Game File journalist Stephen Totilo, Gill's legal team was unhappy with this turn of events and responded swiftly, expressing "serious concerns" to the judge in the case, and speculating Krafton had "intentionally leaked" the memo and release.

Gill's lawyers noted that, as per the court ruling, Papoutsis no longer had authority to make a release announcement at the time the memo was shared. "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," they wrote. "Announcing the release of a game is momentous, and it is typically accompanied by significant marketing activity, fanfare, and community coordination. And most importantly, the announcement is carefully designed to maximise excitement for the game. 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."

In response, Krafton argued there was nothing "improper" about Papoutsis' message, and that he 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." The publisher also argued Gill would still be able to "assess independently his views on the state of Subnautica 2 and the appropriate release schedule", and that Papoutsis' message did not alter "Gill's authority or discretion."

Now, however, Totilo reports Gill's team has filed a new motion arguing that timings suggest Krafton had "continued issuing confirmations" of a May release day to publications even after concerns around Papoutsis' memo had been raised with the judge, and that the publisher's actions had "undermined the relief sought in this expedited phase of the litigation, in which the Founders spent nine months and millions of dollars fighting to restore their bargained-for right to determine when and how the game would launch." Gill's lawyers also said Krafton had "put [Gill] in this position before he even had the opportunity to see the developers' months of hard work to plan a path forward."

Separately, Krafton's lawyers have reportedly asked the court to resolve a dispute around when this week's ruling goes into effect. Gill's team asserts it became effective at 9am on Monday, which would be prior to Papoutis' memo, but Krafton believes it shouldn't take effect until after an "implementing order" - which is still being formalised - has been signed.

Following Monday's ruling in favour of Gill, Krafton told Eurogamer it was "evaluating [its] options as we determine our path forward".

Read this on Euro Gamer
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