Krafton has reached a settlement to end its legal fight with Unknown Worlds Entertainment, agreeing to pay bonuses to all staff at the Subnautica studio. The deal closes out a dispute that saw the studio's CEO fired and reinstated within the space of a year. The agreement lands as Ted Gill, Unknown Worlds' chief executive, confirms he is leaving the studio, capping a turbulent stretch that included his dismissal, a court-ordered reinstatement, and a public airing of Krafton's internal strategy for avoiding the payout.
A Bonus Bigger Than the Original Deal
Under the terms of the settlement, Krafton will pay out compensation to every Unknown Worlds employee across three annual installments, with the total exceeding what was promised in the studio's original 2021 earnout agreement. That original deal, struck when Krafton acquired Unknown Worlds for $500 million plus a $250 million performance bonus, tied the extra payment to financial targets set for the studio. The settlement follows a March 2026 ruling from a Delaware judge who sided with Unknown Worlds' executives, ordering Krafton to reinstate them and extending the earnout window during which the bonus targets could still be met. That extension mattered: Subnautica 2 launched in May 2026 and has since sold 4 million copies, giving the studio a concrete sales figure to point to as it pressed its case for the bonus.
Firings, a Lawsuit, and a ChatGPT Paper Trail
The dispute traces back to summer 2025, when Krafton fired Gill along with Unknown Worlds co-founders Charlie Cleveland and Max McGuire in the middle of the bonus disagreement. The three executives sued, alleging Krafton had deliberately delayed Subnautica 2's launch to run out the clock on the earnout period and dodge the $250 million payment. Krafton denied the accusation, countering in court that the executives had neglected their responsibilities at the studio. The Delaware court sided with the executives in March 2026, ordering their reinstatement. Court proceedings also surfaced an unusual detail: Krafton's CEO had reportedly turned to ChatGPT for advice on how to avoid paying the bonus, a revelation that became one of the more widely discussed elements of the case.
Gill Steps Down After Reinstatement
Despite being reinstated in March, Gill announced on July 1, 2026 that he is stepping down as Unknown Worlds CEO. It is not yet clear who will lead the studio going forward or whether Cleveland and McGuire will remain involved in its operations. The settlement closes a legal battle that exposed friction between Krafton and the studio behind one of its most valuable franchises, even as Subnautica 2's commercial performance ultimately worked in the executives' favor. With Gill's exit now confirmed, attention turns to how Unknown Worlds is led next and what the studio's relationship with its publisher looks like heading into Subnautica 2's next phase of content.
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