The legal conflict between the creators of Subnautica 2 and its publisher Krafton Inc. took another turn in March 2026. A Delaware court ruling has reinstated CEO Ted Gill, extended the studio’s $250 million performance bonus, and barred Krafton from interfering with the game’s release. The developers have been locked in a tense legal battle with Krafton over early access and control of the game’s development timeline.
Court Orders Krafton to Reinstate CEO Ted Gill
In a significant victory for the Subnautica 2 founders, Vice Chancellor Lori W. Will ruled that Krafton had violated the terms of its agreement by firing key executives, including Ted Gill. The court ordered Gill’s reinstatement as CEO of Unknown Worlds Entertainment, with full authority over the game’s development and early access release.
The ruling also extended the deadline for meeting the performance targets tied to the $250 million earn‑out bonus, offering the developers more time to meet revenue goals.
The Origins of the Dispute: Subnautica 2 Delays and Executive Firings
The conflict began in July 2025 when Krafton dismissed Ted Gill, co‑founders Charlie Cleveland and Max McGuire, and replaced them with Steve Papoutsis from Krafton’s Striking Distance Studios. Krafton cited delays in Subnautica 2’sdevelopment as the reason for the firing and pushed back the early access release to 2026.
The developers alleged that Krafton’s move was an attempt to avoid a performance‑based bonus of up to $250 million. Krafton, in turn, argued that the game was not yet ready for release and that leadership changes were necessary for completion.
AI Controversy: Krafton’s Use of ChatGPT in Strategy Development
A surprising twist emerged when court filings revealed that Krafton’s CEO Changhan Kim had consulted ChatGPT to develop a strategy for delaying the game and avoiding the bonus payout. Krafton’s use of AI in its legal and business decisions sparked ethical questions. The court found Krafton’s reliance on AI to be part of its contract breach.
This aspect of the case has prompted a wider debate on how AI is used in corporate decision‑making, especially in high‑stakes legal situations.
Early Access Disputes: Krafton’s Announcement Stirs New Controversy
Despite the court ruling, a new dispute arose over the timing of Subnautica 2’s early access release. Steve Papoutsis, a Krafton-appointed executive, announced that Subnautica 2 was ready for early access in May 2026, contradicting the court’s ruling and raising concerns about violating the CEO’s control over the game’s timeline.
Legal experts are awaiting further clarification from the court on whether this public announcement constitutes contempt of court or whether it was merely an internal communication.
What’s Next for Subnautica 2 and Krafton?
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Krafton is considering appealing the court’s decision, which could delay any final resolution.
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The $250 million bonus remains in dispute, with further legal action expected to determine whether the developers are entitled to the full payout.
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Fans are waiting for confirmation on when Subnautica 2 will enter early access, with Ted Gill retaining ultimate authority over the release schedule.
The legal battle over Subnautica 2 highlights the growing tension between game developers and publishers over control and finances. As of March 2026, Krafton and Unknown Worlds Entertainment remain entrenched in a high‑stakes legal struggle that could influence how future game development contracts are structured.