Krafton slings dirt at fired Subnautica 2 execs, who then declare a lawsuit
The fallout from Krafton’s firing of Unknown Worlds founders and execs last week and the delay of Subnautica 2 has already been pretty wild and messy, but the publisher has now rolled up its sleeves and stepped down into the mud wrestling pits to try and restore its reputation and honour in this situation. In response, studio founder Charlie Cleveland has announced a lawsuit against Krafton.
In a statement posted as a pop-up on the Krafton website – in and of itself a pretty wild way to deliver such a message – Krafton accuses studio founders Charlie Cleveland and Max McGuire of effectively abandoning Subnautica 2’s development to focus on other projects – including an independent movie by Cleveland with a podcast and… uh… AI-generated movie posters – despite repeated requests by Krafton for them to return to work. With the game originally expected to reach Early Access in early 2024, it’s already significantly delayed, and Krafton claim that it is significantly lacking in content for even this stage.
Additionally, Krafton states that 90% of the $250 million payout would have been reserved for studio executives Cleveland, McGuire and former CEO Ted Gill. Importantly, Krafton now state that for the rest of the Unknown Worlds team, they “reaffirm our commitment to provide the rewards they were promised.”
Per Bloomberg’s Jason Schreier, the purchase agreement would mean there’s $25 million to be divided between roughly 40 employees from a team of 100. It’s also still tied to revenue targets.
Making such strong accusations is very significant, because it opens Krafton up to libel and defamation lawsuits. Given the strong community pushback at the publisher, it’s clear they felt they had no choice but to air some dirty laundry.
Charlie Cleveland’s rebuttal states that they “know in our souls that the game is ready for Early Access”, echoing his statement from last week, and denies that they would have taken 90% of the $250 million bonus for themselves, stating that “Historically we’ve always shared our profits with the team and did the same when we sold the studio. You can be damned sure we’ll continue with the earnout/bonus as well.”
Most significantly, he announces that they are suing Krafton: “We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public – you all deserve the full story.”
It’s all an abject mess, and will leave gamers unsure of who to believe. The Subnautica subreddit, for example, seems to still be wholly backing the studio founders, while there’s more doubt in more general gaming subreddits, especially with Cleveland’s movie projects coming to light.
One of the most important things to remember is the the vast majority of the work and the employees are unchanged by this ugly spat. For their sake, maybe it’s best to take a step back and wait for more information to surface before making a conclusion. Sure, remove a wishlisting for the game if you want, but also be open to this project still being good and developed by those with the best of intentions.
Here is Krafton’s full statement:
To Our 12 Million Fellow Subnauts,
Inevitable Leadership Change Driven by Project Abandonment–Despite Holding 90% of Earnout for Themselves
First and foremost, we sincerely thank you for your continued support, passion, and unwavering dedication to Subnautica. We wish to provide clarity on the recent leadership changes at Unknown Worlds, a creative studio under KRAFTON.
Background of Leadership Change
KRAFTON deeply values Subnautica’s unique creativity and immersive world-building. To provide fans with even better gaming experiences, we acquired Unknown Worlds, fully committed to supporting Subnautica’s future success. We collaborated closely with the studio’s leadership, who were central to the creation of the original Subnautica, to foster the optimal environment for a successful Subnautica 2.
Specifically, in addition to the initial $500 million purchase price, we allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives, with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.
However, regrettably, the former leadership abandoned the responsibilities entrusted to them. Subnautica 2 was originally planned for an Early Access launch in early 2024, but the timeline has since been significantly delayed. KRAFTON made multiple requests to Charlie and Max to resume their roles as Game Director and Technical Director, respectively, but both declined to do so. In particular, following the failure of Moonbreaker, KRAFTON asked Charlie to devote himself to the development of Subnautica 2. However, instead of participating in the game development, he chose to focus on a personal film project.
KRAFTON believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule. The current Early Access version also falls short in terms of content volume. We are deeply disappointed by the former leadership’s conduct, and above all, we feel a profound sense of betrayal by their failure to honor the trust placed in them by our fans.
KRAFTON’s Full Support for the Dedicated Development Team
To uphold our commitment to provide you with the best possible gaming experience, we made the difficult yet necessary decision to change the executive leadership. Subnautica 2 has been and continues to be actively developed by a dedicated core team who share genuine passion, accountability, and commitment to the game. We deeply respect their expertise and creativity and will continue to provide full and unwavering support, enabling them to focus solely on delivering the exceptional game you deserve.
KRAFTON’s Commitment to its Promises in Rewarding Employees
Additionally, KRAFTON has committed to fair and equitable compensation for all remaining Unknown Worlds employees who have continuously and tirelessly contributed to Subnautica 2’s development. We believe that the dedication and effort of this team are at the very heart of Subnautica’s ongoing evolution, and we reaffirm our commitment to provide the rewards they were promised.
Fans will always remain at the center of every decision we make at KRAFTON. Moving forward, we promise transparent communication and continued efforts to sustainably develop and expand the beloved Subnautica universe.
Honoring your trust and expectations is a core tenet at KRAFTON. We are committed to repaying your patience with an even more refined and exceptional gaming experience.
And Charlie Cleveland’s rebuttal
Hello everyone,
It continues to be an explosive and surreal time for the Subnautica team and community. None of this is what we wanted. But we truly appreciate the amazing support we’ve gotten from everyone. It means a lot to us, especially now.
As I wrote last week, we know in our souls that the game is ready for Early Access – that’s just how we roll. And we’d like nothing more than for you to play it (game devs live for this). But it’s not currently under our control.
We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public – you all deserve the full story. Suing a multi-billion dollar company in a painful, public and possibly protracted way was certainly not on my bucket list. But this needs to be made right. Subnautica has been my life’s work and I would never willingly abandon it or the amazing team that has poured their hearts into it.
As for the earnout, the idea that Max, Ted and I wanted to keep it all for ourselves is totally untrue. I’m in this industry because I love it, not for riches. Historically we’ve always shared our profits with the team and did the same when we sold the studio. You can be damned sure we’ll continue with the earnout/bonus as well. They deserve it for all their incredible work trying to get this great game into your hands.
Stay tuned.
-Charlie
Sources: Krafton, Reddit
