A judge has ordered Krafton to reinstate Ted Gill as CEO of Unknown Worlds Entertainment, the studio behind the highly anticipated game Subnautica 2. The decision, handed down on March 16, 2026, stems from a legal battle initiated after Gill and other key personnel were terminated last July. This ruling marks a significant turning point in the dispute between Krafton and the cofounders of Unknown Worlds.
The Delaware Chancery Court found that Krafton breached its agreement with Unknown Worlds by firing the key employees “without valid Cause” and by taking control of the studio’s operations. According to the court, the “July 1, 2025 Board resolution” that led to the firings is “declared ineffective to the extent it infringes on Gill’s operational control right.”
Krafton is now prohibited from interfering with Gill’s authority over the early access launch of Subnautica 2 and must restore his access to the Steam platform. The game, first announced in 2022, has garnered significant attention and a large wishlist on Steam, making its release a key event for the gaming industry.
The judge’s decision also extends the timeframe for the Unknown Worlds team to earn a potential $250 million payout tied to the studio’s performance following its sale to Krafton. The cofounders, including Charlie Cleveland and Max McGuire, are now eligible to receive the bonus through September 15, 2026, with the possibility of a further extension. This payout had been a central point of contention, with Krafton allegedly exploring ways to avoid it, including consulting ChatGPT for strategies.
Krafton had initially justified the terminations by claiming the cofounders failed to deliver Subnautica 2 on time. However, Cleveland previously stated on Reddit that the studio believed the game was ready for early access. The legal proceedings revealed that delaying the release could have jeopardized the team’s ability to meet the revenue targets required to unlock the $250 million bonus.
“Judgment is entered in favor of Fortis on its Phase One claims,” Vice Chancellor Lori W. Will wrote in the court decision, as reported by Kotaku. Krafton stated it “respectfully disagrees with today’s ruling” and is evaluating its options.
This ruling underscores the importance of contractual agreements in acquisitions and highlights the potential challenges that can arise when large corporations acquire independent studios. The outcome will likely be closely watched by other developers and publishers as the gaming industry continues to consolidate.
