Krafton Accused of Secret Task Force in Unknown Worlds Takeover
▼ Summary
– The lawsuit trial begins today with former Unknown Worlds executives seeking reinstatement after being fired by Krafton.
– Plaintiffs allege Krafton delayed Subnautica 2’s launch and created “Project X” to avoid paying a $250 million earnout tied to revenue targets.
– Krafton claims it terminated the founders for threatening to self-publish the game and for downloading company files, which the founders deny.
– Internal Krafton communications show the CEO expressed frustration with the acquisition deal and considered the earnout detrimental to Krafton’s interests.
– Krafton’s own assessments indicated Subnautica 2 was ready for release, contradicting claims the game was unready and justifying the delay.
A major legal dispute between Krafton and the former leadership of Unknown Worlds Entertainment is set to begin, centering on allegations that the publisher established a covert operation to avoid paying a substantial earnout tied to the release of Subnautica 2. The lawsuit, brought by founders represented by Fortis Advisors, claims Krafton fired the studio heads and intentionally delayed the game’s launch to sidestep a multi-million dollar bonus payment.
According to legal documents, Krafton initially attempted to convince the founders to postpone Subnautica 2’s release, arguing the title was not prepared for market. When this approach failed, the plaintiffs allege Krafton formed a secret internal group, referred to as “Project X,” with the explicit goal of either negotiating the earnout away or executing a full takeover of Unknown Worlds. The lawsuit contends that after the founders rejected Krafton’s demands, the publisher proceeded to terminate their employment and seize control of the studio.
The core of the complaint revolves around a $250 million bonus linked to revenue targets for Subnautica 2’s planned 2025 Early Access launch. The former shareholders assert that Krafton employed pressure tactics to delay the game and thereby avoid the payout. In its defense, Krafton has accused the three former leaders, Max McGuire, Ted Gill, and Charlie Cleveland, of threatening to self-publish the sequel without the company’s support, which Krafton says left it no option but to dismiss them. The publisher also alleges the founders downloaded thousands of confidential company files and emails prior to their termination, a claim the founders strongly deny, accusing Krafton of changing its justification for the firings midway through the litigation.
Following a successful move by the former Unknown Worlds executives to block Krafton’s request for a court-ordered inspection of their personal devices, Krafton submitted additional legal filings. These new documents include purported Slack messages between Krafton CEO CH Kim and the studio’s newly-appointed CFO, Richard Yoon, discussing a potential takeover. The filings suggest Kim had grown frustrated with the original acquisition agreement, viewing it as a bad deal that left Krafton vulnerable.
The documents further claim that Kim expressed his frustrations directly to Charlie Cleveland during a meeting in Los Angeles, stating that paying the earnout could significantly reduce the studio’s value and that he would be held personally accountable for the investment. Kim reportedly told a colleague that if Cleveland had appeared apologetic during this conversation, he might not have pursued the idea of revoking the earnout.
Internal data presented to Krafton in May indicated that Subnautica 2 was meeting player expectations during playtests. Krafton’s own internal expert reportedly supported a 2025 release and warned that firing Ted Gill would cause development delays lasting several years. Additionally, Maria Park, Krafton’s global head of corporate development, noted that the game was ready for an August launch. In contrast, the legal filing points out that Krafton’s corporate designee could not identify a single employee who genuinely believed the game was unready for release. The plaintiffs urge the court to reject what they describe as Krafton’s continuously changing explanations for its actions.
(Source: Games Industry)
