Subnautica 2 Ex-Leaders Accuse Krafton of Changing Its Story on Why It Fired the Founders Mid-Lawsuit in a Desperate Hail Mary

Subnautica 2 is supposed to be about exploring calm, deep waters. The real-world story around it is anything but. The former bosses of Unknown Worlds are still locked in a fight with parent company Krafton, and their latest move basically accuses Krafton of moving the goalposts on why it fired them and took the wheel.

The quick catch-up

• Early July: Krafton puts Steve Papoutsis (chief creative officer at The Callisto Protocol studio Striking Distance) in as CEO of Unknown Worlds, replacing former CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire.
• Shortly after: Subnautica 2 is delayed to 2026.
• The ex-leadership trio sues Krafton.
• Krafton fires back, saying the three are chasing a multimillion-dollar payout they did not earn, tried to self-publish Subnautica 2 without Krafton, and left the company with no choice but to terminate them. Krafton also claims they secretly downloaded a large amount of confidential Unknown Worlds data in breach of the purchase agreement.
• Now: In new court filings reported by GamesIndustry.biz, Gill, Cleveland, and McGuire say Krafton is shifting its explanation mid-lawsuit. They claim Krafton originally said it fired them to stop a premature Subnautica 2 launch, but later pivoted to a different reason: file backups the founders say they were allowed to access as part of their jobs.
• The filing calls that pivot a last-ditch scramble and argues Krafton admits it only learned about the downloads after the firings, so those backups could not be the real reason for termination.
• Also in those filings: the court denied Krafton’s request for a forensic inspection and turned down a preservation order. The case is not over; both sides are expected to meet next.
• Meanwhile, fans floated a Subnautica 2 boycott. New CEO Papoutsis responded to that sentiment with a very short take.

What the founders say Krafton changed

The ex-Unknown Worlds leaders argue Krafton’s first story was that they were about to push Subnautica 2 out the door before it was ready, and that is why they were removed. According to the new filings, Krafton later leaned on a different rationale: that the founders downloaded and backed up studio files. The trio’s position is that those backups were part of normal work, not off-limits, and that Krafton only dug up that angle after firing them. In their words, it is a late-game Hail Mary that does not line up with the timeline.

Krafton’s side (so far)

Krafton’s earlier court response painted a very different picture: it says Gill, Cleveland, and McGuire were aiming for a big cash payout via litigation; that they tried to take Subnautica 2 out from under Krafton by self-publishing; and that the company had no choice but to end their employment. On top of that, Krafton alleges the trio quietly pulled down massive amounts of confidential Unknown Worlds data in violation of the acquisition deal.

Where the case stands right now

Two process-y, inside-baseball notes from the latest filings: the judge declined Krafton’s request for a forensic inspection (think: combing through devices) and also denied a preservation order. That does not end anything on the merits; it just means those specific requests did not fly. The parties are expected to meet next, and the broader dispute rolls on.

The game and the new boss

Subnautica 2 is now targeting 2026. Unknown Worlds is under Krafton, and Steve Papoutsis, who also serves as chief creative officer at Striking Distance (The Callisto Protocol), is the new CEO at the studio.

He also reacted to fans talking about boycotting the sequel with this blunt line:

"Wow ... That’s very disappointing."

Bottom line: the legal surf is still choppy, the schedule slipped to 2026, and both sides are digging in. I will keep an eye on the next hearing and any more mid-lawsuit plot twists.