Krafton has reached a legal settlement over the long running dispute with subsidiary Unknown Worlds Entertainment, best known for the Subnautica series.

"Krafton, Inc., Unknown Worlds Entertainment, and Ted Gill, Charlie Cleveland, and Max McGuire have reached a mutual settlement and agreed to dismiss all pending legal proceedings," reads a statement from Krafton sent to Game Developer.

Unknown Worlds will continue to lead development on Subnautica 2, while Krafton is set to provide support "for the success of the game."

The executives Gill, Cleveland, and McGuire have been in a legal dispute with Krafton since July 2025. Back then, the group alleged the parent company intentionally delayed Subnautica 2, as well as other misdeeds, to avoid an extra $250 million payout.

Krafton disputed the claim, filing its own countersuit and claiming the Unknown Worlds leader ship had abandoned the game and stole Subnautica 2 materials and documents.

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This led to an ever increasing back-and-forth conflict that had seemingly come to an end in March when Krafton lost the lawsuit and was ordered to reinstate Gill after being ousted. It wasn't until today, after Subnautica 2 went on to sale more than four million copies, that both parties reached a settlement.

According to Bloomberg's interview with Gill, Krafton has agreed to pay bonuses to the entire Subnautica 2 staff.

Meanwhile, the CEO has mutually agreed to part ways. "New leadership is the best way for the studio to move forward," he told the publication.

Gill said the developers of Subnautica 2 will be "compensated significantly more" than called for under the original acquisition agreement. Moreover, the staff is set to receive "further incentives" as the game continues to be updated.

Initially, the bonus was meant to compensate the aforementioned three top executives, as well as staff who were at the company during the 2021 acquisition. Now, Gill says everyone at the studio will receive a payout, including those who joined more recently. Said bonuses will be paid in three annual installments.

Now, Krafton and Unknown Worlds will search for a new CEO for the studio from outside of both companies, Gill said.

"We're all super excited about Subnautica 2 and its tremendous success."

About the Author

Diego Argüello

Contributing Editor, News, GameDeveloper.com

Diego Nicolás Argüello is a freelance journalist and critic from Argentina. Video games helped him to learn English, so now he covers them for places like The New York Times, NPR, Rolling Stone, and more. He also runs Into the Spine, a site dedicated to fostering and supporting new writers, and co-hosted Turnabout Breakdown, a podcast about the Ace Attorney series. He’s most likely playing a rhythm game as you read this.