A pre-trial brief filed by lawyers representing the ousted former heads of Subnautica 2 studio Unknown Worlds alleges that Krafton CEO Changham Kim was “desperate” to avoid paying them the bonuses required by their acquisition contract because of the “professional embarrassment” that would result from the perception that he overpaid for the studio. The filing claims Kim went so far as to consult with AI to figure a way out of paying, but even ChatGPT told him he was probably stuck.
The legal dispute between Krafton and Subnautica designer and director Charlie Cleveland, CEO Ted Gill, and studio co-founder Max McGuire has been dragging on since July, when all three very suddenly left their positions. While the departures were initially presented as amicable, it quickly became clear that it was anything but. Legal action was filed by both sides and it’s gotten very messy: Krafton initially said the three were fired because of the state of Subnautica 2 and their insistence on releasing it before it was ready, but in September it seemed to drop that claim in favor of focusing on allegations the founders had “deceived” Krafton, including that they’d downloaded confidential information relating to Subnautica 2—which only came to light after they’d been dismissed.
Today’s pre-trial brief, available in full via Game Developer, seems aimed at rebutting those claims, alleging that Krafton was fully aware of what was happening at the studio, and in some cases had even expressed support for it: Regarding Krafton’s complaint that Cleveland had effectively abandoned Subnautica 2 to focus on making a movie, for instance, the filing claims Krafton actually encouraged it.
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The filing claims, as the former Unknown Worlds heads have maintained all along, that despite Krafton’s insistence to the contrary, the Unknown Worlds heads were fired simply so Krafton wouldn’t have to pay the sizable earnout required by the studio’s acquisition contract.
“Already concerned that Krafton had paid too much to acquire Unknown Worlds, Kim feared that making any earnout payment to Founders would earn him a reputation as a pushover and endanger his position as CEO,” it states. “Desperate to avoid such a professional embarrassment, Kim obsessed over finding a way to avoid Krafton’s obligation to pay the earnout.”
The pre-brief claims Krafton head of corporate development Maria Park told Kim that Krafton would likely have to pay the earnout if sales targets were achieved even if the studio heads were dismissed with cause. At that point the CEO “turned to artificial intelligence to help him brainstorm ways to avoid paying the earnout,” the filing claims. “ChatGPT likewise advised that it would be ‘difficult to cancel the earnout’.”
A footnote in the filing states that “Krafton did not produce the ChatGPT conversations and, when pressed, confirmed that they no longer exist,” and the company denied the allegations entirely in a statement provided to PC Gamer.
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“No,” a company representative said when asked if the claim was accurate. “This claim is simply a distraction from their own efforts to destroy evidence, such as Charlie’s reminder to the other Key Employees (Max and Ted) to delete anything ‘incriminating’ from their own ChatGPT accounts. the contrary to Fortis’s claims, Krafton offered to extend the earnout period if the Key Employees returned to their contractually required roles..”
The ChatGPT-powered brainstorming is amusingly ironic given Krafton’s recent claim to being an “AI-first company,” but it’s ultimately a moot point. The filing claims that since it was apparently impossible to avoid paying the earnout if Subnautica 2 launched as planned, the only option was to push it outside the earnout window. To that end, the filing claims Krafton initiated “Project X,” aimed at either establishing a deal with the founders to delay the Subnautica 2 early access launch or forcing a takeover of the studio.
Krafton denied that allegation as well, calling it “without merit.” The company said that as a result of Charlie and Max’s actions, “Krafton was forced to gather and keep track of the ongoing attempts to repair those relationships, try to get Charlie and Max back doing their jobs, and work to release a successful Subnautica 2. The former executives are trying to turn that hard work into something nefarious.”
As a result of all of the above, Subnautica 2 is now slated to launch into early access sometime in 2026. I’ve reached out to Krafton for comment and will update if I receive a reply.
