Krafton's Shadow Play: CEO Allegedly Orchestrated 'Project X' Power Grab at Subnautica Studio

Krafton Accused of Sabotaging Subnautica 2 Launch to Avoid Massive Earnout Payment

Krafton's Shadow Play: CEO Allegedly Orchestrated ...

The legal battle between Krafton, the parent company of Unknown Worlds, and the studio's former co-founders is intensifying, with new accusations surfacing that paint a picture of corporate maneuvering aimed at avoiding a substantial earnout payment. Charlie Cleveland, Max McGuire, and Ted Gill, the ousted founders of the Subnautica developer, allege that Krafton established a secret task force, codenamed "Project X," to deliberately delay the highly anticipated Subnautica 2. This delay, they claim, was a calculated move to avoid triggering a multi-million dollar earnout tied to the game's successful early access launch.

The pre-trial brief, filed by Fortis Advisors on behalf of the plaintiffs, accuses Krafton CEO Changhan 'CH' Kim of prioritizing financial gain over the project's success, even if it meant undermining the development team. The document alleges that Kim was motivated by a desire to protect his own position, fearing that a massive earnout payout would reflect poorly on his leadership and diminish Krafton's overall corporate value.

The Earnout as a 'Threat'

The heart of the dispute lies in the earnout agreement established when Krafton acquired Unknown Worlds. The brief describes this earnout, linked to the early access performance of Subnautica 2, as a "threat" to CEO Kim's job security. The plaintiffs argue that as projections indicated a potential $191 million payout in May 2025, Krafton sought a way to "cancel the earnout."

'Project X' and Takeover Discussions

According to the plaintiffs, when initial attempts to renegotiate the earnout failed, Krafton allegedly formed "Project X." This task force was purportedly tasked with either reaching a new agreement with the founders or executing a takeover of Unknown Worlds, effectively seizing control and circumventing the payout. The brief includes Slack messages between CEO Kim and Unknown Worlds' CFO, Richard Yoon, seemingly discussing the possibility of a takeover.

Krafton, however, maintains that the delay in Subnautica 2's release is due to the game needing further development and that the founders "downed tools" after the acquisition. They also accuse the former executives of stealing proprietary information, including a "blueprint" for Subnautica. The trial promises to be a contentious affair, with both sides presenting conflicting narratives and potentially revealing sensitive internal communications. The outcome could have significant implications for future acquisitions and earnout agreements within the gaming industry.