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The Krafton dispute is no longer ongoing: in July 2026, reporting said Krafton, Unknown Worlds Entertainment, and studio figures Ted Gill, Charlie Cleveland, and Max McGuire reached a settlement and agreed to dismiss all pending legal proceedings. Cleveland had announced the lawsuit a year earlier, amid a dispute over studio leadership, control of Subnautica 2, and acquisition-related earnout compensation.
Why Unknown Worlds’ parent company was involved
Krafton announced its acquisition of Unknown Worlds Entertainment in October 2021. It said the Subnautica developer would remain an independent game-development studio wholly owned by Krafton. That ownership relationship later put the studio’s leadership and the terms of its acquisition at the center of a legal dispute.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
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Subnautica (PS4) | $23.46 | Buy on Amazon |
| 2 |
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Subnautica + Subnautica Below Zero Double Pack (Nintendo Switch) | $45.60 | Buy on Amazon |
| 3 |
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Subnautica - Xbox One | $69.14 | Buy on Amazon |
What Cleveland said in July 2025
In July 2025, Unknown Worlds co-founder Charlie Cleveland publicly announced that he and others had filed suit against Krafton. He wrote: “We’ve now filed a lawsuit against Krafton: the details should eventually become (at least mostly) public – you all deserve the full story.”
The dispute concerned the removal of Unknown Worlds leaders, who had authority over the studio and Subnautica 2, and contingent earnout compensation connected to the acquisition. The earnout issue mattered financially because it involved compensation tied to conditions in the acquisition agreement; the available reporting does not establish a verified amount or reproduce all of those terms. Claims made by the parties about the dispute should be understood as allegations, not as facts established simply by the filing.
#1 Best Overall
- Descend into the depths of an alien underwater world filled with wonder and peril
- Craft equipment, pilot submarines and out-smart wildlife
- Explore lush coral reefs, volcanoes, cave systems, and more
- Underwater survival and exploration
How the case developed—and ended
| When | What happened | What it means |
|---|---|---|
| October 2021 | Krafton announced its acquisition of Unknown Worlds and described the studio as remaining independent while wholly owned by Krafton. | This established the parent-company relationship and the acquisition agreement relevant to the later dispute. |
| July 2025 | Cleveland announced that a lawsuit against Krafton had been filed. | This was the public announcement of litigation, not a final finding on either side’s claims. |
| March 2026 | The Delaware Court of Chancery issued a significant ruling on agreement and operational-control issues, including remedies concerning Ted Gill’s authority and the early-access process for Subnautica 2. | The court’s decision addressed issues during the dispute; it was not the final resolution between the parties. |
| June–July 2026 | Settlement reporting, including a July 1 report by Game Developer quoting a Krafton statement, said the parties reached a mutual settlement and agreed to dismiss all pending legal proceedings. | The settlement and agreed dismissals, rather than the earlier filing or interim court ruling, describe the reported outcome. |
What the settlement does—and does not—establish
The statement quoted by Game Developer said: “Krafton, Inc., Unknown Worlds Entertainment, and Ted Gill, Charlie Cleveland, and Max McGuire have reached a mutual settlement and agreed to dismiss all pending legal proceedings.” That is a reported agreement to settle and dismiss the proceedings; it is not a judicial finding that either side’s allegations were true.
The same settlement reporting described expanded bonus compensation for studio staff and Gill’s departure from the studio leadership role. The full settlement agreement is not reproduced in the available reporting, so its detailed financial terms and any additional conditions should not be inferred from those summaries.
Quick Recap
Rank #3
- Dive into a vast underwater world - sub Nautica's ocean range from shallow coral reefs to treacherous deep-sea trenches, lava fields, and bio-luminescent underwater rivers
- Scavenge, craft, and survive - after crash landing in your life pod, the clock is ticking to find water, food, and to develop equipment needed to explore as you collect resources from the ocean
- Construct underwater habitats - build Bases on the sea Floor, choosing layouts and components, and managing hull-integrity as depth and pressure Increase
- Unravel the mystery - signs abound that something is not right and you must Figure out what happened to this planet and what caused you to crash - can you find a way to make it Off the planet alive
- Disrupt the food Chain - lure and distract a threatening creature with a fresh fish, or simply swim as fast as you can to avoid gnashing jaws of roaming predators
Rank #2
- Survival is key: gather valuable materials, craft tools, manage your hunger and thirst, all while evading the dangerous wildlife that sees you as its next meal
- the mysteries submerged on planet 4546b: you came here in search of answers. You risked everything to get here and you will not leave until you have uncovered the truth…
- exploration: Delve into unique Aquatic and terrain biomes that will unlock not only materials, but the answers that you seek
- build your habitat: crafting and building the comforts of home here. These bases will be integral for your survival from not only the wildlife, but also the harsh environment around you
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