IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
`
`FORTIS ADVISORS, LLC, a Delaware
`limited liability company, as the
`Representative of the former shareholders
`of Unknown Worlds Entertainment,
`
` Plaintiff,
`v.
`
`KRAFTON, INC.,
`
` Defendant.
`
`C.A. No. 2025-0805-LWW
`
`REDACTED PUBLIC VERSION
`E-Filed: July 16, 2025
`
`VERIFIED COMPLAINT
`Plaintiff Fortis Advisors, LLC, in its capacity as shareholder representative for
`
`the former shareholders of Unknown Worlds Entertainment, by and through its
`
`attorneys, brings this Verified Complaint against Defendant Krafton, Inc., and
`
`alleges as follows:
`
`INTRODUCTION
`
`1.
`
`Four years ago, Defendant Krafton, Inc. purchased Unknown Worlds
`
`Entertainment, a wildly successful independent video game studio. The deal
`
`involved a $500 million up-front payment, plus an earnout that could reach $250
`
`million depending on Unknown Worlds’ performance through 2025. This case arises
`
`from Krafton’s desperate efforts to avoid paying the earnout, and its flagrant
`
`contractual breaches in pursuit of that goal.
`
`1
`
`EFiled: Jul 16 2025 11:34AM EDT
`Transaction ID 76656323
`Case No. 2025-0805-LWW
`
`
`
`FORTIS ADVISORS, LLC, a Delaware
`limited liability company, as the
`Representative of the former shareholders
`of Unknown Worlds Entertainment,
`
` Plaintiff,
`v.
`
`KRAFTON, INC.,
`
` Defendant.
`
`C.A. No. 2025-0805-LWW
`
`REDACTED PUBLIC VERSION
`E-Filed: July 16, 2025
`
`VERIFIED COMPLAINT
`Plaintiff Fortis Advisors, LLC, in its capacity as shareholder representative for
`
`the former shareholders of Unknown Worlds Entertainment, by and through its
`
`attorneys, brings this Verified Complaint against Defendant Krafton, Inc., and
`
`alleges as follows:
`
`INTRODUCTION
`
`1.
`
`Four years ago, Defendant Krafton, Inc. purchased Unknown Worlds
`
`Entertainment, a wildly successful independent video game studio. The deal
`
`involved a $500 million up-front payment, plus an earnout that could reach $250
`
`million depending on Unknown Worlds’ performance through 2025. This case arises
`
`from Krafton’s desperate efforts to avoid paying the earnout, and its flagrant
`
`contractual breaches in pursuit of that goal.
`
`1
`
`EFiled: Jul 16 2025 11:34AM EDT
`Transaction ID 76656323
`Case No. 2025-0805-LWW
`
`
`
`2.
`
`From the outset, both sides understood that the earnout would largely
`
`hinge on the next release in Unknown Worlds’ smash-hit game franchise,
`
`Subnautica—an underwater survival game that became a global sensation, selling
`
`over
`
` million copies.
`
`3.
`
`Key to Subnautica’s remarkable success—and to the ethos of Unknown
`
`Worlds as a company—was its release into “early access.” A model that Unknown
`
`Worlds pioneered over the last two decades, early access lets players purchase the
`
`game while still in development, providing indispensable feedback as they play and
`
`allowing the company to improve the game in real time. Early access has helped
`
`Unknown Worlds build an intensely devoted fanbase that operates in symbiosis with
`
`the company. It is a relationship founded on mutual trust, openness, and respect.
`
`4.
`
`Given its importance to the original’s success, the company planned to
`
`release Subnautica 2 into early access as well. The launch was slated to happen in
`
` of this year. And the fans were waiting eagerly. Almost 2.5 million of them
`
`had “wishlisted” the game on Steam (the leading computer gaming platform),
`
`making it the second most anticipated PC title in the entire world. And pre-release
`
`playtesting—involving hundreds of real users devoting thousands of hours—drew
`
`high marks and confirmed that the game was ready to meet those lofty expectations.
`
`5.
`
`But the promise of such immediate and enormous success presented a
`
`problem for Krafton. Certainly, it eventually wants the game to drive revenue. But a
`2
`
`
`
`blockbuster
`
` launch—squarely within the earnout period—would likely
`
`trigger the $250 million earnout to the studio’s former owners and employees.
`
`Beyond the Founders, many of Unknown Worlds’ dedicated team members were set
`
`to receive payments ranging from hundreds of thousands to millions of dollars.
`
`6.
`
`As Krafton’s CEO told Unknown Worlds’ leadership, an
`
` early
`
`access release would have been disastrous for Krafton.
`
`7.
`
`So Krafton engaged in a months-long campaign to delay Subnautica 2’s
`
`release. It pulled key marketing materials, refused to follow through with crucial
`
`partnerships, and reneged on long-standing commitments to handle important pre-
`
`launch tasks. Multiple Krafton employees themselves suggested that these moves
`
`were for the purpose of frustrating the earnout, despite the earnout agreement’s
`
`prohibition on taking actions for that purpose.
`
`8.
`
`Even in the face of these pressure tactics, Unknown Worlds refused to
`
`delay the launch. The game was (and is) ready for early access;
`
` 2025 is the
`
`ideal commercial window for release; and the agreement gave Unknown Worlds
`
`complete operational control over Subnautica 2. So rather than cave to Krafton’s
`
`bullying, Unknown Worlds took on these pre-launch tasks itself and pressed forward.
`
`9.
`
`This left Krafton out of options. Its efforts at delay had failed, and the
`
`launch was imminent. So Krafton decided to go nuclear. In flagrant disregard of the
`
`parties’ contract, Krafton terminated without cause three former owners of Unknown
`3
`
`
`
`Worlds—Charles Cleveland, Adam “Max” McGuire, and Edward “Ted” Gill (the
`
`“Founders”)—and seized control of the company.
`
`10. Krafton’s first decision upon taking over? To delay the launch of
`
`Subnautica 2 until sometime in 2026. That way, Krafton could keep the game’s
`
`revenue for itself, while avoiding the $250 million earnout it would likely have owed
`
`the Founders and other Unknown Worlds employees.
`
`11. Krafton, however, has gravely miscalculated.
`
`12.
`
`First, the backlash from the Subnautica community has been immediate
`
`and overwhelming. Tens (or hundreds) of thousands have voiced their outrage that,
`
`as one fan put it, “Subnautica’s soul has just been ripped out.” Many have said they
`
`will no longer participate in early access. Others have promised to boycott the game
`
`altogether. In one extraordinary moment of corporate greed, Krafton has decimated
`
`the community trust that Unknown Worlds spent decades building. And in so doing,
`
`it has already severely harmed the financial prospects for Subnautica 2. Krafton’s
`
`ploy—delay the game, avoid the earnout, keep the money for itself—backfired.
`
`13.
`
`Second, the Founders will not stand idly by while Krafton tears down
`
`what they built and ignores its contractual obligations. The earnout agreement
`
`promised the Founders complete operational and creative control over Unknown
`
`Worlds. And it forbade Krafton from terminating the Founders without cause. But in
`
`4
`
`
`
`its desperation to avoid paying the earnout, Krafton flatly disregarded both of these
`
`obligations, among many others.
`
`14.
`
`Plaintiff Fortis Advisors, the shareholder representative for Unknown
`
`Worlds’ prior owners, therefore seeks equitable and monetary relief to remedy
`
`Krafton’s breaches. No matter what happens next, Krafton’s actions have already
`
`severely damaged fan anticipation and undermined the potential release of
`
`Subnautica 2. Krafton should thus be ordered to pay the full earnout it would have
`
`owed had it not terminated the Founders and tanked the
`
` launch. Plaintiff also
`
`seeks specific performance of Krafton’s obligations under the agreement, including
`
`the return of complete creative and operational control to the Founders. The game,
`
`the company—and the community that helped build it—deserve nothing less.
`
`THE PARTIES
`Plaintiff Fortis Advisors serves as the shareholder representative for the
`
`15.
`
`former shareholders of Unknown Worlds Entertainment, an American independent
`
`video game studio that was purchased by Defendant Krafton, Inc. in an October 2021
`
`Equity Purchase Agreement (“EPA”) (attached hereto as Exhibit A). Fortis Advisors
`
`is a party to the EPA. It is incorporated in Delaware and has its principal place of
`
`business in San Diego, California.
`
`16.
`
`The full group of Unknown Worlds’ former shareholders who sold their
`
`business in connection with the EPA are defined herein as “Sellers.” This group
`5
`
`
`
`included the Founders, along with other employees who have dedicated years of
`
`their lives to Unknown Worlds.
`
`17. Among the Sellers, three individuals—Charlie Cleveland, Max
`
`McGuire, and Ted Gill—held approximately
`
` of Unknown Worlds’ shares
`
`before the sale to Krafton. These individuals are defined herein as the “Founders.”1
`
`18. Defendant Krafton, Inc. is a South Korean video game publisher and
`
`holding company who purchased Unknown Worlds pursuant to the EPA.
`
`JURISDICTION AND VENUE
`This Court has subject matter jurisdiction over Plaintiff’s claims
`
`19.
`
`pursuant to 10 Del. C. § 341 and 6 Del. C. § 2708(b).
`
`20.
`
`This Court has personal jurisdiction over Krafton because it expressly
`
`consented to the jurisdiction of this Court in Section 11.14(b) of the EPA.
`
`21. Venue is proper in this Court because Krafton expressly consented in
`
`Section 11.14(b) of the EPA to venue in this Court for any action arising out of the
`
`EPA. The EPA requires such actions to be brought in this Court.
`
`1 Ted Gill joined the company after it was founded, but he has long been central to
`its operations, was one of three major shareholders, and served as its CEO before
`being terminated last week. This Complaint will include him in the term “Founders”
`for ease of reference.
`
`6
`
`
`
`I.
`
`FACTUAL BACKGROUND
`Unknown Worlds Builds Incredible Games Premised on Community
`Feedback, Pioneering the “Early Access” Business Model.
`22. Unknown Worlds is a critically acclaimed independent video game
`
`developer that is known in the industry—and particularly by its community of fans—
`
`for its commitment to crafting unique gaming experiences.
`
`23.
`
`Founded by Charlie Cleveland in 2003, Unknown Worlds has sought to
`
`“unite the world through play” for over 20 years. “Collaborating with a dynamic
`
`community to cultivate daringly original worlds” is its mission.
`
`24. With Cleveland at the helm, Unknown Worlds’ first great success was
`
`Natural Selection, a “mod” of another legendary game, Half-Life. Natural Selection
`
`received Gamespy’s PC Game of the Year award for 2002, praised as “possibly the
`
`most ambitious user-made modification ever brought to fruition.”
`
`25. With Natural Selection, Cleveland’s relationship with Unknown
`
`Worlds’ fans was born. He and his team collaborated closely with the fan community,
`
`listening to their feedback to understand and fix any bugs they found, addressing
`
`their desires for the game, and inviting community contributions such as player-
`
`designed maps.
`
`26.
`
`From 2002 to 2006, based on community feedback, Unknown Worlds
`
`regularly released updated versions of Natural Selection with additional features and
`
`7
`
`
`
`bug fixes. With Natural Selection fervor spreading around the world, Unknown
`
`Worlds launched regional-specific websites and supported an “NS Guides” program
`
`through which community members welcomed and helped new players.
`
`27. Cleveland was hooked on making games, and the community’s
`
`enthusiasm for his work was so great that he believed he could make a commercial
`
`go at it. By 2006, Cleveland and his team got to work on Natural Selection 2.
`
`28. When Cleveland needed additional talent to build Natural Selection 2,
`
`he hired superfans to join the team. Among them was Cleveland’s friend Max
`
`McGuire, who would go on to become Unknown Worlds’ Technical Director.
`
`29. As a small independent developer, the company did not have the deep
`
`pockets of larger video game publishers. Whereas larger publishers would
`
`traditionally release only a final version of a game (doing all testing and refinement
`
`in-house), Unknown Worlds needed a more creative business model to ensure
`
`adequate funding.
`
`30. As with Natural Selection, Unknown Worlds launched the sequel in an
`
`“early access” release—i.e., it released the game in a non-final version, enabling
`
`further development and customization based on community feedback. Early access
`
`releases were rarities at that time, and Unknown Worlds became known in the
`
`industry as a pioneer of the model.
`
`8
`
`
`
`31. With the eventual “v1.0” release of Natural Selection 2 in October
`
`2012, the game hit the top of Steam’s sales charts, and Unknown Worlds again
`
`received industry praise. Natural Selection 2 confirmed that early access would be
`
`essential to the business. It allowed Unknown Worlds to launch playable games that
`
`the company could then refine in partnership with its fan community, together
`
`building what the game would ultimately become.
`
`32.
`
`Early access was so significant that Unknown Worlds embraced it as a
`
`studio pillar: “We believe that our games excel when they are built with, by and for
`
`dynamic communities. We value and respect our players’ time, ideas and
`
`engagement.”
`
`33. Unknown Worlds continued its active development of Natural
`
`Selection 2 for ten years, announcing its end after 117 updates in February of 2023.
`
`Unknown Worlds released a heartfelt thank you to its fan community—the “game
`
`would not have been the same without” them, the Company said in a February 2023
`
`blog post.
`
`II.
`
`In Partnership with its Community, Unknown Worlds Makes its
`Masterpiece: Subnautica.
`34. On the heels of Natural Selection 2’s success, Unknown Worlds
`
`announced a new project in 2013: Subnautica, an underwater survival and
`
`exploration game.
`
`9
`
`
`
`35.
`
`In the game, the player controls Ryley Robinson, the survivor of a
`
`spaceship crash landing on an alien oceanic planet. Players explore the dangerous
`
`waters, finding essential resources, evading predators, and seeking a way to escape
`
`the planet.
`
`Subnautica for Nintendo Switch, Nintendo.com (last visited July 7, 2025).
`36. Unknown Worlds immediately welcomed its community aboard: “Over
`
`the coming months, we hope you will join us. We hope you will tell us what we are
`
`doing right, what we are doing wrong, and help us stay on course.”
`
`37. Unknown Worlds pushed Subnautica to an early access release in
`
`December 2014. At that time, the game was a blank canvas in an evocative setting,
`
`lacking the story, survival game mechanics, and some key features it would come to
`
`be known for (including submarines and base-building). Through four years of early
`10
`
`
`
`access refinement, Unknown Worlds and its dedicated community together built the
`
`great success that Subnautica became.
`
`38.
`
`“‘Subnautica’ is a Perfect Early Access Example,” trumpeted Inverse,
`
`an entertainment, science, and culture publication. “From day one, the Subnautica
`
`team has aimed for transparency. They’ve opened up their development process to
`
`the public . . . . Due to the direct level of contact players have with the developers,
`
`and the deep-seated passion for the game, a community grounded in positivity and
`
`excitement has sprung up around Subnautica—something that’s pretty rare in the
`
`video game industry.”
`
`‘Subnautica’ Is A Perfect Early Access Example, Inverse.com (last visited July 8,
`2025).
`
`11
`
`
`
`39.
`
`Subnautica’s full release in January 2018 was lavished with praise:
`
`“Subnautica is a template for what open-world survival games should strive to be,”
`
`IGN, a leading industry publication, proclaimed.
`
`40. Members of the fan community raved about Subnautica too, describing
`
`it as “like nothing else out there,” and as “truly something special” that left them
`
`with a “sense of wonder that’s so enthralling.”
`
`41.
`
`The game also received critical acclaim, winning the Fan Favorite Indie
`
`Game at the Gamers’ Choice Awards and PC Game of the Year at the Golden Joystick
`
`Awards. Unknown Worlds was recognized too, winning the Breakthrough Award at
`
`the Golden Joystick Awards.
`
`42. On the heels of this success, Cleveland sought to bring in someone with
`
`business expertise to help guide the company. Ted Gill, who had played Subnautica
`
`since its first prototype, joined as President in 2018.
`
`43.
`
`To meet fans’ ravenous demand for more Subnautica, Unknown Worlds
`
`developed a spin-off—Subnautica: Below Zero—that it released via early access in
`
`January 2019.
`
`44. During the early access period, fans made clear that Below Zero’s
`
`storyline was not landing and that they wanted additional changes to gameplay.
`
`Unknown Worlds made major revisions to the story, expanded the world, and added
`
`12
`
`
`
`vehicles and creatures before Below Zero had its full release in May 2021. This game
`
`too achieved great commercial success.
`
`45.
`
`To date, the Subnautica franchise has sold over
`
` million copies,
`
`generating over
`
` million in gross revenue. And that number is growing still.
`
`46. With the unbelievable success of the Subnautica franchise, Unknown
`
`Worlds proved itself as a development company that created enthralling games and
`
`captured the attention of gamers worldwide. And essential to its success at every
`
`stage was launching games in early access, bringing the community into the
`
`development process.
`
`III. Unknown Worlds Sells to Krafton, Retaining Control of its Games while
`Gaining Financial Stability and an Earnout Incentive.
`47. By 2021, Unknown Worlds sought a partner to help the studio reach
`
`even more players worldwide. Teaming up with a company that could provide
`
`international marketing and global branding capabilities would enable Unknown
`
`Worlds to bring more new games to its growing fan community and do so more
`
`quickly.
`
`48. Unknown Worlds had a great offer for any investor or buyer: behind
`
`closed doors, Cleveland and his team had a new game in production (Moonbreaker)
`
`and team members who had worked on Below Zero were set to lead the charge on
`
`the next game in the Subnautica franchise (Subnautica 2).
`
`13
`
`
`
`49.
`
`In October 2021, Krafton, Inc.—a South Korean video game publisher
`
`and holding company—announced that it would acquire Unknown Worlds. Pursuant
`
`to the EPA, Unknown Worlds would remain an “independent studio,” thereby
`
`maintaining its autonomy to develop and launch great games.
`
`50. Krafton recognized “Unknown Worlds’ proven ability to create
`
`immersive experiences that resonate with gamers around the world,” and it
`
`represented publicly and privately that it would not change the soul of the studio. In
`
`a press release, Krafton wrote, “Unknown Worlds’ structure and leadership will
`
`remain in place to retain its unique creative identity.”
`
`51. Krafton’s CEO Changhan “CH” Kim told Cleveland and Gill that he
`
`was particularly excited that Unknown Worlds would bring its expertise in early
`
`access launches to Krafton.
`
`52. Kim also commended Unknown Worlds and promised great support:
`
`“Unknown Worlds are incredibly skilled and passionate developers with an
`
`unparalleled gift for creativity and a proven track record of building successful
`
`player-driven worlds. Krafton will spare no effort in helping them. Not only do they
`
`enhance our development capabilities, but we share a goal of creating unique
`
`experiences for global audiences.”
`
`53.
`
`In creating these unique experiences, Kim wanted Cleveland to develop
`
`Subnautica’s “franchise IP” with cross-media expansion beyond the game, into
`14
`
`
`
`television or movies. In addition to Moonbreaker, the franchise-IP effort would
`
`become Cleveland’s focus.
`
`54. Krafton’s promises are memorialized
`
`in
`
`the Equity Purchase
`
`Agreement, signed October 29, 2021. Plaintiff Fortis Advisors was the shareholder
`
`representative for Unknown Worlds’ former owners.
`
`55.
`
`In addition to the $500 million up front purchase price, a key
`
`component of the EPA is the earnout provision, under which the Sellers—the
`
`Founders and other Unknown Worlds’ employees alike—were eligible for an earnout
`
`bonus of up to $250 million based on Unknown Worlds’ revenue through December
`
`31, 2025, with the option to extend the earnout period through June 2026. EPA
`
`§ 2.7(a)–(b).
`
`56.
`
`The earnout formula considers the
`
`. EPA § 2.7. The earnout amount is calculated by
`
`
`
`
`
`, with a cap at $250
`
`million. EPA § 2.7.
`
`57.
`
`The Founders owned approximately
`
` of the shares of Unknown
`
`Worlds at the acquisition, but in recognition of their team members’ great work, the
`
`EPA is structured to provide an outsized earnout to Unknown Worlds’ employees. It
`
`sets aside fully 10% of the earnout amount to be distributed across the team. Beyond
`15
`
`
`
`this guarantee, the Founders planned to share even more of the earnout with their
`
`dedicated team.
`
`58.
`
`To support the team’s opportunity to gain that earnout, the Founders
`
`wanted to be sure they retained control of their revenue streams and could not be
`
`terminated arbitrarily.
`
`59.
`
`In the EPA, Krafton agreed that the Founders would “maintain
`
`operational control of the Group companies in all material respects, including (for
`
`both existing and new products) product roadmap, launch, planning, partnering,
`
`budgeting and employee matters,” so long as at least one of the three of them was
`
`still employed. EPA § 2.7(f).
`
`60.
`
`The EPA was consistent with the Founders’ employment agreements,
`
`which similarly reflect that they would
`
`:
`
` Cleveland, McGuire, and
`
`Gill Employment Agreements § 2(b).
`
`61. Krafton also promised that “[n]otwithstanding anything to the contrary”
`
`in the agreement, it could not “terminate any employee” of Unknown Worlds during
`
`16
`
`
`
`the earnout window—including the Founders—“without the prior written consent of
`
`a majority of” the Founders. EPA § 2.7(f).
`
`62.
`
`The sole exception to that prohibition allows Krafton to terminate
`
`employees “for Cause,” EPA § 2.7(f), a high bar requiring commission of a “felony,”
`
`“an intentional act of fraud or dishonesty,” “intentional, wrongful disclosure of trade
`
`secrets,” or a “willful act or omission by such individual that constitutes gross
`
`misconduct and that is injurious to [Unknown Worlds],” where “willful” means
`
`“committed without good faith and without a reasonable belief that the act or
`
`omission was in [Unknown Worlds’] best interest,” EPA § 1.1 (“Cause” definition).
`
`63. Krafton further agreed “not [to] take any actions, the primary business
`
`purpose of which is to deprive Sellers’ Earnout Payments,” and to “consult in good
`
`faith with the management of [Unknown Worlds] . . . prior to taking any action that
`
`would reasonably be expected to materially decrease the Earnout Amount.” EPA
`
`§ 2.7(e).
`
`64.
`
`Largely because of Krafton’s promises to leave creative and
`
`commercial control over Unknown Worlds in their hands, the Founders were excited
`
`to work with Krafton: “We’re truly looking forward to our future together,”
`
`Cleveland said in a press release.
`
`17
`
`
`
`IV. With Krafton’s Promises of Support, Unknown Worlds Works on Its
`Next Big Hit: Subnautica 2.
`65. Under Krafton’s umbrella, Unknown Worlds continued the great work
`
`it had been doing when it was fully independent. As before the acquisition,
`
`Cleveland was largely focused on running the Moonbreaker team, while others at
`
`Unknown Worlds ideated on new game concepts and continued working toward
`
`Subnautica 2. Cleveland also got to work on the Subnautica film Krafton’s CEO had
`
`encouraged him to pursue.
`
`66. Unknown Worlds’ first release post-acquisition was Moonbreaker, a
`
`turned-based strategy video game set in an expansive science-fiction universe.
`
`Unknown Worlds worked on Moonbreaker for five years before the early access
`
`release in September 2022, holding the game for internal development and
`
`improvement far past the point it had released earlier games. Although the company
`
`achieved financial success in this time period (largely due to the continued strength
`
`of the Subnautica franchise), Moonbreaker did not sell as well as the team hoped.
`
`67.
`
`For Unknown Worlds, the lesson was crystal clear: early access releases
`
`are core to its DNA, and community feedback during game development is essential
`
`for its developers to build games the fans love.
`
`68.
`
`Following extensive communications with Krafton about how
`
`developed Subnautica 2 needed to be for early access, Unknown Worlds pushed the
`
`18
`
`
`
`planned early access release date back to the fourth quarter of 2024 and then to the
`
`first half of 2025. The fan community’s excitement for the game increased when, in
`
`November of 2023, Krafton revealed in a financial report that the Subnautica sequel
`
`would be released on that timeline.
`
`69. With additional review of the game within Unknown Worlds, and
`
`additional feedback from and conversations with Krafton, Unknown Worlds pushed
`
`the release date one last time to
`
` 2025. Unknown Worlds saw this as the sweet
`
`spot for the release timing—late enough to allow its developers to get the game ready
`
`and early enough for the fan community to join the effort and help the developers
`
`iterate. Krafton agreed.
`
`70. Conversations with Krafton also led the Founders to clarify their
`
`responsibilities in 2024 by changing their titles within Unknown Worlds. As the
`
`company was growing rapidly and working on several major projects at a time, it
`
`was natural for the Founders to take on a more supervisory role across the company,
`
`as opposed to remaining pigeonholed on a specific game or project.
`
`71.
`
`The Founders discussed the plan with Krafton executives, who later
`
`confirmed to Gill that Krafton’s CEO fully supported the plan.
`
`72. Cleveland’s title changed from “CEO and Design Director” to
`
`“Franchise Creative Director,” removing administrative tasks Krafton required of a
`
`CEO and allowing him to focus on Subnautica’s cross-media expansion and in
`19
`
`
`
`particular on the Subnautica film. Cleveland moved to Los Angeles to network with
`
`Hollywood creatives in support of the film.
`
`73. McGuire’s title changed from “Technical Director” to “Special Projects
`
`Director” so that he—Unknown Worlds’ most talented engineer—could focus on
`
`research and development within the studio rather than on managing people.
`
`74.
`
`Finally, Gill’s title changed from “President” to “CEO,” a role that
`
`allowed him to free Cleveland from Krafton-mandated administrative tasks and was
`
`consistent with the leadership role he had taken on in his years since joining the
`
`company. Multiple Krafton executives congratulated Gill on assuming his new role.
`
`75. Krafton updated the Founders’ roles in Workday (its HR system) by
`
`August 12, 2024, and on official organizational charts thereafter. Krafton also
`
`updated Cleveland’s title on its public-facing website, where it highlighted certain
`
`employees.
`
`People, Krafton.com (screenshot captured June 20, 2025).
`20
`
`
`
`76. Given its centrality to the company’s success, the Founders of course
`
`maintained an active role with Subnautica 2—driving its overall creative and
`
`commercial direction and supervising the day-to-day leads. But the role
`
`clarifications allowed them to widen their scope and push for the kind of broad
`
`“franchise IP” success that Krafton wanted.
`
`77. With the role clarifications complete, Unknown Worlds pushed ahead
`
`and unveiled the next step for the Subnautica franchise. It released the Subnautica 2
`
`teaser trailer in October of 2024 on YouTube, where it has hundreds of thousands of
`
`subscribers. The fan community expressed great enthusiasm in the comments:
`
`21
`
`
`
`78. With the teaser trailer—which has been viewed over 15 million times
`
`across all platforms, to date—Unknown Worlds confirmed that the game would
`
`release to early access in 2025.
`
`79. On Steam, fans rushed to “wishlist” Subnautica 2, a method of
`
`bookmarking a game of interest in order to receive sales and release notifications. In
`
`a stunning demonstration of community enthusiasm, Subnautica 2 rocketed to the
`
`#2 most wishlisted game in the entire world, with over 2.48 million signups.
`
`80.
`
`It was clear to everyone involved that Unknown Worlds had another
`
`smash hit on its hands.
`
`81. Once again, early access was key to Unknown Worlds’ strategy—and
`
`to generating such remarkable fervor within the gaming community. The symbiosis
`
`of game creation and community participation promised millions of copies sold in
`
`the year after launch.
`
`V.
`
`Krafton Begins to Worry That Subnautica 2’s Success Will Force it to Pay
`the Earnout.
`82. As momentum for Subnautica 2 was building, the reality of what this
`
`would mean for the earnout hit Krafton. When that happened, everything changed.
`
`83.
`
`In early 2025, given the upcoming release of Subnautica 2, Gill was
`
`negotiating incentive bonuses for the many employees who were not guaranteed to
`
`22
`
`
`
`receive earnout pay because they joined Unknown Worlds after Krafton’s
`
`acquisition.
`
`84.
`
`In the course of those conversations, Gill provided Krafton executives
`
`a set of realistic financial projections incorporating Subnautica 2’s release. Under
`
`one projection, the Founders and other Unknown Worlds’ employees would earn
`
` and under the other they would make
`
`.
`
`85.
`
`In subsequent conversations, Gill confirmed that these revenue
`
`projections were conservative and that the actual revenue would likely be higher.
`
`Not only were the scenarios missing significant revenue streams—specifically
`
`Mobile and Nintendo Switch 2 sales—they also likely underestimated continued
`
`sales of Subnautica and Subnautica: Below Zero. Those games would have a bump
`
`in sales when Subnautica 2 launched.
`
`86.
`
`Perhaps more importantly, the projections considered only what the
`
`earnout would be if the window ended in 2025. But the EPA permits the window to
`
`be extended through June 2026. With nearly a full year of Subnautica 2 revenue
`
`included, it is highly likely that the Founders and other Unknown Worlds’ employees
`
`would make
`
`.
`
`87.
`
` That was the turning point in Unknown Worlds’ relationship with
`
`Krafton. After Krafton’s leaders reviewed Gill’s projections and evaluated the
`
`anticipated revenue and earnout numbers, everything changed.
`23
`
`
`
`88. During the first week of April 2025, Unknown Worlds’ publishing
`
`colleagues in Krafton’s El Segundo, California office traveled to Korea to finalize
`
`the marketing and advertising strategy for Subnautica 2’s
`
` launch.
`
`89. Upon their return, the El Segundo team—Krafton employees—reported
`
`to Gill that Krafton’s leadership was not focused on a successful launch, but instead
`
`on how it could convince Unknown Worlds to delay the game.
`
`90.
`
`The El Segundo colleagues informed Gill that Krafton’s legal team was
`
`combing through the agreements looking for any opening to terminate the Founders
`
`if they proceeded with the planned
`
` release. The El Segundo colleagues told
`
`Gill it was clear that Krafton was aiming to avoid paying the earnout.
`
`91.
`
`The Founders were shocked. Krafton had promised in the EPA that it
`
`would not take any actions with the primary business purpose of depriving Sellers
`
`of the earnout payments. And now it appeared that Krafton was taking steps to delay
`
`the launch—and even fire the Founders—for that very purpose.
`
`92.
`
`The clash between the game’s prospects and Krafton’s delay goals
`
`crystallized after Gill met with Krafton’s Chief Global Publishing Officer, Jin Oh.
`
`93. During an April 8 meeting, it appeared Oh had not received the message
`
`from Krafton Headquarters that Subnautica 2 needed to be delayed. Oh told Gill that
`
`the Founders were being too conservative in their sales figures for Subnautica 2, that
`
`they needed to aim bigger.
`
`24
`
`
`
`94. Oh wanted to put together a business and marketing plan to sell 2–3
`
`million copies by December 31, 2025,
`
`. This
`
`would have left the Sellers poised to easily make their full $250 million earnout.
`
`95. Oh pointed to Krafton’s recent early access launch of another game,
`
`inZOI, which sold 1.1 million copies in the first week, despite having significantly
`
`less content and being less developed than Subnautica 2. Oh thought Unknown
`
`Worlds should easily double that sales figure with proper publishing support.
`
`96. But days later, the Founders received confirmation that Krafton’s
`
`support had gone cold. On April 11, 2025, Krafton’s Head of Publishing for the
`
`Americas reported to Gill that Krafton was looking to delay the game but did not
`
`seem to have a valid reason for doing so.
`
`97.
`
`From mid-April forward, Krafton began building a new story: that
`
`Subnautica 2 was not ready and could not be released in
`
` 2025.
`
`VI. Krafton Embraces Obstructionist Tactics to Delay Subnautica 2 and
`Avoid Paying the Earnout.
`98. At this point, Krafton began a months-long campaign designed to delay
`
`Subnautica 2’s launch and avoid the earnout.
`
`99.
`
`In late April, Krafton’s Chief Global Publishing Officer declared that
`
`Krafton wanted to assign a new publishing team to Subnautica 2, despite Unknown
`
`Worlds’ great relationship with Krafton’s El Segundo publishing unit. Unknown
`
`25
`
`
`
`Worlds’ only requests were for Krafton to assign someone who had experience in
`
`shipping early access titles, could work with Unknown Worlds’ mostly American
`
`and European time zones, and spoke English at least conversationally.
`
`100. Krafton met none of those requests. It assigned a VP of Publishing who
`
`had extremely limited experience releasing a PC game, had just worked on his first
`
`early access title, was based in Korea (and thus in a different time zone than needed),
`
`and did not speak English.
`
`101.
`
`In meetings throughout May, Krafton’s publishing team advanced the
`
`new company line: S
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