The Subnautica 2 lawsuit is getting even messier, with Krafton doing a massive U-turn, confusing both the ousted founders’ lawyer and the judge: ‘This is a little bit bewildering’
By Fraser Brown
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The Subnautica 2 lawsuit is getting even messier, with Krafton doing a massive U-turn, confusing both the ousted founders’ lawyer and the judge: ‘This is a little bit bewildering’
Fraser Brown
19 September 2025
One of its key claims, that the founders were terminated because they wanted to release Subnautica 2 before it was ready, has been dropped.
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(Image credit: Unknown Worlds Entertainment)
It wasn’t all that long ago that we were anticipating the imminent arrival of Subnautica 2. The sequel to the superb underwater survival game has yet to appear, though, and the founders of Unknown Worlds have been ousted by owner Krafton, leading to a messy legal dispute between the two parties.
One of the reasons given for the termination was the state of the game. The founders believed that it was ready for an early access launch and planned to go through with it; Krafton, meanwhile, believed it wasn’t ready for its debut and that the founders had been shirking their duties.
But there’s been a surprising U-turn, with Krafton significantly changing its argument.
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The lawsuit is now in the discovery phase, so Fortis Advisors, which represents the ousted founders, sought discovery to see if Krafton held evidence to back up its claims. “But despite its obvious relevance, Krafton feigned astonishment during the parties’ meet and confers at how it could possibly be part of Phase I,” Fortis said.
Essentially, Krafton said that documents relating to the readiness of the game were irrelevant to the termination—which is what this phase of discovery is focused on—despite this being the reason cited in the termination notices, which was also repeated publicly and in court.
“The termination notices of the founders gave one reason for their termination,” said Fortis, “and that was the supposed lack of readiness of Subanutica 2 for release. Krafton reiterated that basis for its actions repeatedly.”
Fortis called it a “seismic shift in the case” and “a little bit bewildering”. This was also echoed by the judge, Lori W. Will, when the parties met for a ruling on the filed motions, saying: “Well, that’s something that we definitely need to get to the bottom of today, because that is precisely what was cited as the reason in the answer.”
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Krafton’s representatives were not clear about why this argument has been taken off the table, only that it has been, and that it’s no longer why they are saying the founders were terminated.
Instead, Krafton is focusing on the argument that the founders “abandoned their posts” and “deceived” their employer. Causing more confusion is the accusation that the founders downloaded files and kept devices with confidential information on them. This only came to light after the termination, so its relevance has been questioned.
Krafton’s position is that this justified their termination after the fact, and it filed a motion to forensically inspect the founders’ devices. The founders, meanwhile, contend that they had a right to those documents and devices, and that the motion is too invasive—and to the latter point, the judge agreed.
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The Subnautica 2 saga gets nastier, with ousted leaders confirming they’ll sue Krafton: ‘It continues to be an explosive and surreal time’
Fortis also alleged that Krafton hasn’t been playing ball, pushing back against some of its requests for discovery and refusing to confer. It claimed it needs emails and documents that relate to the earnout (the founders have accused Krafton of intentionally delaying the game so it wouldn’t have to pay a $250 million earnout) but Krafton is only willing to provide data from two people high up in the company, rather than employees who were “on the ground”.
Another point of contention is what documents Krafton is willing to provide: specifically, only where the word “earnout” intersects with the word “termination”.
“That’s very narrow,” the judge replied. “That sounds like a really terrible email for someone to write, and it’s hard for me to imagine that they’d be that blunt about it.”
Krafton also argued that the plaintiff requested too many custodians—people who possess relevant data—and that it would take too long. The judge agreed the number was too high, but that the two parties would need to confer—something that Krafton had previously declined to do after it changed its argument. “That’s very frustrating,” the judge said.
The discussion of the motions ended with both parties agreeing to confer, at least, and confirmation that game readiness was not the reason why the founders were terminated.
Still, the whole thing remains rather messy, and it continues to be unclear why Krafton has made a U-turn when it was so adamant before that the state of Subnautica 2 was one of the reasons the founders were fired, which only happened after discovery was sought. What does seem clear, though, is that this likely won’t be resolved any time soon.
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Fraser Brown
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Online Editor
Fraser is the UK online editor and has actually met The Internet in person. With over a decade of experience, he’s been around the block a few times, serving as a freelancer, news editor and prolific reviewer. Strategy games have been a 30-year-long obsession, from tiny RTSs to sprawling political sims, and he never turns down the chance to rave about Total War or Crusader Kings. He’s also been known to set up shop in the latest MMO and likes to wind down with an endlessly deep, systemic RPG. These days, when he’s not editing, he can usually be found writing features that are 1,000 words too long or talking about his dog.
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The Subnautica legal dispute takes a surprise twist as Unknown Worlds—not Krafton—sues its former bosses for stealing confidential material on their way out the door
Krafton fires back at Unknown Worlds lawsuit, says Subnautica 2 was at risk of causing ‘irreversible harm to the entire franchise’ like Kerbal Space Program 2
The Subnautica 2 saga gets nastier, with ousted leaders confirming they’ll sue Krafton: ‘It continues to be an explosive and surreal time’
Krafton accuses former Subnautica 2 bosses of abandoning the game in surprising new statement: ‘We feel a profound sense of betrayal by their failure to honor the trust placed in them’
Unknown Worlds founders’ lawsuit accuses Krafton of a ‘months-long campaign to delay Subnautica 2’ so it wouldn’t have to pay $250M earnout
Krafton confirms Subnautica 2 leak showing that the publisher wanted more content for the early access launch, leading to delay and leadership ouster
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