Krafton has agreed to pay bonuses to the entire staff of Unknown Worlds Entertainment, ending a year of litigation that became one of the strangest corporate governance episodes in gaming history. The settlement, announced July 1, 2026, also confirms that CEO Ted Gill is stepping down — and that Krafton's own CEO used ChatGPT to plan how to avoid paying the $250 million earnout in the first place.
Game Overview
| Item | Detail |
|---|---|
| Title | Subnautica 2 |
| Developer | Unknown Worlds Entertainment |
| Publisher | Krafton |
| Platforms | PC (Steam), Xbox Series X/S, Xbox Game Pass |
| Release | May 14, 2026 (Early Access) |
| Genre | Underwater survival adventure, up to 4-player co-op |
| Price | $29.99 |
| Copies Sold | 4 million+ (first week) |
Event Timeline
| Date | Event |
|---|---|
| October 2021 | Krafton acquires Unknown Worlds for $500M, with a $250M earnout tied to financial milestones |
| Summer 2025 | Krafton fires CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire, citing "lack of leadership" and development delays |
| Late 2025 | Fired executives sue Krafton in Delaware Court of Chancery, alleging intentional delays to avoid the bonus payout |
| March 2026 | Delaware court rules in favor of Unknown Worlds; orders Krafton to reinstate executives and extend the earnout period |
| March 2026 | Court filings reveal Krafton CEO Changhan Kim used ChatGPT to plan "Project X" — a strategy to renegotiate the earnout and seize studio control |
| May 14, 2026 | Subnautica 2 launches in Early Access; sells 4M+ copies in its first week, generating ~$100M in revenue |
| July 1, 2026 | Settlement reached: all lawsuits dropped, all Unknown Worlds staff get bonuses, Ted Gill steps down |
How the Dispute Started
Krafton — the South Korean publisher behind PUBG: Battlegrounds — acquired Unknown Worlds Entertainment in October 2021 for $500 million. The deal included a crucial clause: an earnout worth up to $250 million payable when Subnautica 2 hit certain financial targets.
The arrangement looked straightforward. Unknown Worlds had a proven IP, a passionate community, and a sequel already in development. Then, in the summer of 2025, Krafton fired CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire, citing "lack of leadership" and delays on Subnautica 2.
The executives pushed back hard. They sued Krafton in the Delaware Court of Chancery, alleging the publisher had deliberately slowed Subnautica 2's development through "pressure tactics" specifically to avoid triggering the bonus clause. Their argument: Krafton was engineering failure to escape a $250 million bill.
The ChatGPT Detail That Changed Everything
The March 2026 ruling made the case famous well beyond the gaming industry.
According to court filings, Krafton CEO Changhan Kim had consulted ChatGPT for advice on how to get out of paying the earnout. The chatbot was used to help plan what Krafton internally called "Project X" — a strategy to renegotiate the earnout terms and seize operational control of the studio.
The judge found that Krafton had breached its acquisition agreement by terminating the executives without valid cause. The ChatGPT consultation became part of the official court record, and media widely described it as what may be the most expensive ChatGPT consultation in corporate history.
Subnautica 2 Early Access gameplay footage / Image: Unknown Worlds Entertainment
Each Side's Position
Unknown Worlds / Ted Gill
""We mutually agreed to part ways." — Ted Gill (Bloomberg)
Gill is stepping down as part of the deal, but framed the outcome positively: under the settlement, developers will be "compensated significantly more" than the original acquisition agreement called for. Crucially, the bonus was expanded beyond the three top executives and 2021-era staff — everyone at the studio, including recent hires, will receive a share.
Krafton
""Krafton and Unknown Worlds are focusing on the development and official launch of Subnautica 2, putting fan experience as our utmost priority." — Krafton official statement
""Going forward, Unknown World will continue to lead the development, while Krafton will continue to provide support necessary for the game's success." — Krafton official statement
Krafton acknowledged the settlement and dropped all remaining monetary damages proceedings that the Delaware court had flagged. The company did not immediately comment on the ChatGPT detail.
Settlement Terms at a Glance
| Term | Detail |
|---|---|
| Who gets paid | All Unknown Worlds staff, including recent hires |
| Payment structure | Three annual installments |
| Payout amount | "Significantly more" than original earnout terms |
| CEO | Ted Gill steps down as part of the agreement |
| Next CEO | To be recruited from outside both Krafton and Unknown Worlds |
| Remaining litigation | All pending monetary damages proceedings dropped |
Subnautica 2's Commercial Reality
Here is the irony: Subnautica 2 was a hit. Released into Early Access on May 14, 2026, the game sold over 4 million copies in its first week, generating an estimated $100 million in revenue. The executives' argument was essentially proved by the market — there was never a reasonable basis for claiming the game was a failure.
Subnautica 2 is a departure from the lone-survivor dread of the original. It's an up to 4-player co-op underwater survival adventure set on a new alien world, where players build bases, craft tools, and explore an ocean full of bioluminescent secrets. The Game Pass day-one inclusion drove wide adoption across Xbox and PC, and the game is still actively receiving Early Access updates.
Community Reaction
Developer community: Reaction across game-dev communities was broadly positive for the Unknown Worlds team. The expanded bonus — covering new hires who weren't even at the studio during the 2021 acquisition — was widely praised as "unusually fair." On Reddit and X (formerly Twitter), the case was framed as a landmark precedent for developer protections in acquisition deals.
Criticism of Krafton: The ChatGPT revelation did measurable damage to Krafton's reputation. Developers and industry observers noted that PUBG's publisher — one of the most commercially successful studios of the past decade — was caught using an AI chatbot to strategize around a contractual obligation. Comments along the lines of "this is what happens when publishers treat studios as IP farms" trended across gaming forums in the days following the ruling.
Industry implications: The case has renewed debate about how earnout clauses in gaming M&A deals should be structured. Several industry commentators argued that standard earnout agreements give publishers too much operational leverage, making it too easy to game the conditions. Legal experts noted the Delaware ruling sets a useful precedent: courts will look at intent, not just the surface-level justification for terminations.
GamePeak Take
Three things are worth keeping in mind as the dust settles.
The ChatGPT angle matters beyond the meme. A CEO consulting an AI chatbot for high-stakes legal strategy isn't just embarrassing — it's a cautionary tale about how organizations frame internal decision-making in writing. Whatever Changhan Kim typed into ChatGPT became discoverable evidence. The lesson isn't "don't use AI"; it's "anything you write down is a record."
Developer protections need stronger contract language. Unknown Worlds won because they had a paper trail and a sympathetic court. Many studios in similar situations don't make it that far. The earnout structure — where payouts depend on conditions a publisher can influence — remains a systemic risk. This ruling won't change that overnight, but it sets a benchmark.
Subnautica 2's future looks cleaner now. With litigation resolved, Unknown Worlds can focus on the roadmap. A new CEO search from outside both organizations is underway. Whether the publisher-developer relationship normalizes after this much turbulence is an open question — but at minimum, the team building the game is finally getting paid.