The legal dispute between Krafton and the former heads of Subnautica 2 developer Unknown Worlds took an unexpected turn today as Unknown Worlds—not Krafton, but Unknown Worlds specifically—has sued its former bosses for abandoning their responsibilities to the studio and Subnautica 2, breaching their employee agreements by stealing confidential materials prior to their dismissal, and damaging the reputation of the studio and the next Subnautica game.
The broad strokes of the matter are already pretty well known: The former heads of Unknown Worlds—Subnautica designer and director Charlie Cleveland, CEO Ted Gill, and studio co-founder Max McGuire—accuse Krafton of sabotaging and intentionally delaying Subnautica 2 in order to avoid paying a $250 million earnout to the studio, while Krafton insists Subnautica 2 is nowhere near ready for release, even in early access, but that the trio were determined to push ahead with it anyway, even though doing so risks turning it into another Kerbal Space Program 2.
This lawsuit adds a new layer, though, by alleging that the "key employees," as they're called, violated their confidentiality agreements by downloading tens of thousands of documents shortly before their termination. Gill allegedly downloaded "a full and complete copy of his Unknown Worlds email account" in early June, triggering an IT alert in the process; he reportedly did it again on June 30, days after he was informed of his imminent termination.
Cleveland reportedly downloaded 72,140 files from his Unknown Worlds Google Drive and company share folders, and "almost certainly was stopped in progress—his last download occurred just eight minutes before the Company shut off his system access," the lawsuit states. It also claims that a preliminary review indicates those files "include reams of sensitive, proprietary, and confidential information, including game design files and Subnautica concepts."
"McGuire completed the trifecta of mischief," the suit continues, claiming that he downloaded 99,902 files on June 27, including hundreds of files related to Moonbreaker, Unknown Worlds' turn-based "digital miniatures experience" that died on the table in February 2024. Unknown Worlds says it sent cease-and-desist letters to all three, and demanded they return everything they'd taken; in response, they denied breaching their confidentiality agreements and "threatened to delete the information themselves," which Unknown Worlds did not find satisfactory because it would thwart further investigations into the matter.
As for why this particular twist to the tale matters in Unknown [[link]] Worlds' [[link]] lawsuit, the studio alleges its former heads have "improperly used or disclosed" the information to members of the press in [[link]] order to publicize their claims against Krafton: "Such public disclosure has harmed and will continue to harm Unknown Worlds and jeopardize the future of the Subnautica franchise."
For the most part, this lawsuit looks like a pretty typical courtroom counter-punch, but the fact that it comes from Unknown Worlds and not Krafton, the parent company and central player in everything that's happened so far, struck me as odd: Why would Krafton not file its own action, in its own name, against the former Unknown Worlds bosses?
"Unknown Worlds is the legal entity directly harmed by the former executives’ misconduct," a Krafton representative told PC Gamer in an email. "While Krafton is the parent company, the contracts, intellectual property and confidential information at issue belong to Unknown Worlds. The defendants were executive leadership at Unknown Worlds, and their obligations, including confidentiality and fiduciary duties, were owed to that entity."
While undoubtedly technically accurate, I still wonder about the value, and frankly the point, of the distinction, and whether Krafton is maybe hoping to engender a sort of "even their own studio is against them" feeling among observers. Unknown Worlds is wholly owned by Krafton, after all, and so any harm suffered by the studio is suffered by Krafton as well. It also seems likely that Krafton has some hand in directing this lawsuit: Richards, Layton, and Finger, the law firm representing Unknown Worlds in this lawsuit, also represents parent company Krafton.
The Unknown Worlds lawsuit is demanding the return of all materials taken by its three principals, as well as an order awarding it "all rights, title, and interests" in any properties they developed during their employment "including but not limited to all movie scripts, movie footage, game design, game code, playtests, or other software development," plus damages and legal fees.
