Subnautica 2 Lawsuit 2026, $250M Battle Continues As Krafton Faces ChatGPT Allegations, Fired Founders Demand Reinstatement
The Subnautica 2 lawsuit remains unresolved as of February 2026, with fired Unknown Worlds founders battling publisher Krafton over a $250 million earnout. Trial proceedings began in November 2025 in Delaware Chancery Court, but no verdict or settlement has been announced despite explosive allegations that Krafton CEO Changhan Kim consulted ChatGPT on how to avoid paying the bonus.
This gaming industry legal battle pits three ousted executives against a billion-dollar publisher in a dispute over whether Krafton deliberately sabotaged Subnautica 2’s early access launch to dodge hundreds of millions in contractual obligations.
What the Subnautica 2 Lawsuit Involves
Founders Charlie Cleveland and Max McGuire, along with CEO Ted Gill, filed the lawsuit in July 2025 after Krafton fired them and delayed Subnautica 2 from its planned 2025 early access launch to 2026.
The core allegation is straightforward. Plaintiffs claim Krafton terminated them specifically to avoid paying a $250 million earnout tied to Subnautica 2 hitting revenue targets in 2025. By firing the leadership team and delaying the game to 2026, Krafton allegedly made it impossible to trigger the bonus payment.
Court filings reveal that Krafton acquired Unknown Worlds in 2021 for $500 million with an additional $250 million earnout clause payable if Subnautica 2 met certain benchmarks before June 2026.
The ChatGPT Allegations That Shocked The Industry
Pre-trial briefs filed in November 2025 contained bombshell allegations that drew worldwide attention. According to court documents, Krafton CEO Kim consulted ChatGPT for advice on “how to cancel the earn-out.”
The AI reportedly responded that canceling such contractual obligations would be “difficult.”
Plaintiffs allege Krafton then refused to produce the actual ChatGPT conversation logs during discovery, claiming they “no longer exist.” The founders’ legal team argues this demonstrates premeditated intent to avoid the payment.
Court filings also reference “Project X”—an alleged secret task force Krafton created to delay Subnautica 2 and justify terminating the founders. Similar corporate maneuvering cases, like the Ashes Of Creation Lawsuit, Game Studio Shuts Down After $850K Breach Of Contract Claim, show how gaming industry financial disputes can end studios entirely.
Krafton’s Shifting Legal Defense
Krafton initially claimed it fired the trio because they wanted to release Subnautica 2 “prematurely” before the game was ready for early access.
But during the discovery phase in September 2025, Krafton withdrew this argument after failing to produce evidence supporting the claim. The company then stated that documents about the game’s readiness were “irrelevant to the termination.”
This legal U-turn confused both the plaintiffs’ attorney and the presiding judge, who called it “a little bit bewildering” according to PC Gamer reporting.
Krafton later added new counterclaims, alleging the founders downloaded hundreds of thousands of confidential documents in late May 2025—essentially stealing a “blueprint” for Subnautica. The company claims this data theft happened after the trio learned they would be fired.
Where The Case Stands Now
Trial proceedings began November 17, 2025 in Delaware Chancery Court. As of February 2026, no verdict or settlement has been publicly announced.
The plaintiffs are demanding full reinstatement to their positions at Unknown Worlds, payment of the full $250 million earnout, and additional damages for reputational harm and lost income.
Krafton extended the earnout deadline into 2026 and restructured it so that $25 million would go to approximately 40 remaining Unknown Worlds employees—but the remaining $225 million that would have gone to the fired executives is no longer available to them.
Gaming industry observers compare this case to the 2010 Infinity Ward lawsuit where Call of Duty executives sued Activision over unpaid royalties. That case settled after two years of litigation.
How This Affects Video Game Contract Law
This lawsuit highlights the vulnerability of earnout agreements when acquisitions involve milestone-based bonuses. Corporate buyers have strong incentives to delay or cancel payments if financial projections change.
Cases like the Destiny 2 Red War Lawsuit SETTLED, Bungie Pays Off Blogger andValve Class Action Lawsuit, Valve Sued For $1 Billion demonstrate how complex gaming industry litigation has become.
How To Follow Case Developments
Court documents are accessible through the Delaware Chancery Court docket system. The case involves significant discovery materials including internal Krafton emails, Slack messages, and financial projections from May 2025.
Gaming news outlets including PC Gamer, Kotaku, GameSpot, and Game Developer continue covering developments as they emerge from court proceedings.
Frequently Asked Questions
What is the Subnautica 2 lawsuit about?
The lawsuit alleges Krafton fired Unknown Worlds founders and delayed Subnautica 2 specifically to avoid paying a $250 million earnout tied to the game’s 2025 early access launch. Krafton denies this, claiming the founders lost interest in development.
When was this lawsuit filed?
The founders filed the lawsuit in July 2025 in Delaware Chancery Court after being terminated and removed from their positions at Unknown Worlds.
Who is involved in this lawsuit?
Plaintiffs are Charlie Cleveland, Max McGuire, and Ted Gill (former Unknown Worlds leadership). The defendant is Krafton Inc., the South Korean publisher that acquired Unknown Worlds in 2021.
What are the main allegations?
Plaintiffs allege Krafton deliberately sabotaged Subnautica 2’s launch timeline to avoid the $250M earnout, consulted ChatGPT on avoiding the payment, and created “Project X” to justify terminations. Krafton claims the founders abandoned development and later stole confidential data.
What is the current status of this case?
Trial began November 17, 2025 in Delaware Chancery Court. No verdict or settlement has been announced as of February 2026. The case remains actively litigated.
What are the next steps in this litigation?
The court will evaluate evidence from both sides including financial projections, internal communications, and testimony about Subnautica 2’s development status. A verdict could come in early-to-mid 2026.
How can I stay updated on this case?
Follow gaming industry legal news sites, check the Delaware Chancery Court public docket, or monitor official statements from Krafton and the plaintiffs’ legal representatives at Fortis Advisors.
Last Updated: February 9, 2026
Disclaimer: This article provides general legal information about the Subnautica 2 lawsuit and is not legal advice. For specific legal guidance, consult a qualified attorney.
Following other gaming industry legal battles? Check our coverage of video game lawsuits and settlements for the latest developments.
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About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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