The ouster of Unknown Worlds founders Charlie Cleveland and Max McGuire—along with now-former CEO Ted Gill—is rapidly escalating in a series of dramatic twists and turns. Since last week, Cleveland and Krafton have been taking shots at one another in statements to the public, with the founder and his peers now filing a lawsuit against the company that bought their studio.
The escalation began on July 10, 2025 with a statement from Krafton addressed to the Subnautica player community where the company accused Cleveland, McGuire, and Gill of “abandoning the responsibilities” involved with developing Subnautica 2. “Krafton made multiple requests to Charlie and Max to resume their roles as game dame director and technical director…but both declined to do so,” the company wrote. It then described the financial performance of Unknown Worlds’ tabletop-inspired multiplayer game Moonbreaker a “failure,” and accused Cleveland of focusing on a “personal film project” instead (Cleveland did post 7 months ago on Reddit about making a film called A Christmas Letter).
This statement followed a report from Bloomberg on July 9 that Krafton had delayed Subnautica 2 to 2025 to avoid a $250 million payout to Unknown Worlds. The payout would have been tied to the studio hitting key revenue goals by the end of 2025, goals it would likely miss if Subnautica 2 were delayed to 2026.
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“Krafton believes that the absence of core leadership has resulted in repeated confusion in direction and significant delays in the overall project schedule,” it continued. “The current Early Access version also falls short in terms of content volume. We are deeply disappointed by the former leadership’s conduct, and above all, we feel a profound sense of betrayal by their failure to honor the trust placed in them by our fans.”
Hours later, Cleveland took to Reddit to announce he and his peers are suing Krafton. Bloomberg games reporter Jason Schreier has stated that the lawsuit being filed for breach of contract, but the complaint is currently under seal.
“The details should eventually become (at least mostly) public,” wrote the Unknown Worlds co-founder. “You all deserve the full story. Suing a multi-billion dollar company in a painful, public and possibly protracted way was certainly not on my bucket list. But this needs to be made right.”
“Subnautica has been my life’s work and I would never willingly abandon it or the amazing team that has poured their hearts into it.”
Was Subnautica 2 ready to release in Early Access?
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Underneath Krafton and Cleveland’s cross-fired accusations is a single (apparently $250 million) question: is Subnautica 2 ready to launch in Early Access this year?
Krafton claims it isn’t, saying that the current Early Access build “falls short in terms of content volume.” Cleveland stated in a Reddit post last week that he, McGuire, and Gill “know” that the game is ready for Early Access release. “While we thought this was going to be our decision to make, at least for now, that decision is in Krafton’s hands.”
There’s no independent standard to apply regarding a game’s readiness for Early Access. However a former indie publisher lead producer (who requested anonymity to speak freely to protect sensitive information) explained that at their former employer, games entered Early Access “largely feature-complete.” “Every update in Early Access was about bringing more playtime content,” they explained. “We got several iterations ahead before Early Access, so that there were about 1.5 updates ready and waiting to ship in those first 6-8 weeks before launch.”
One of those updates would be “fully planned and packaged,” going through a full pass by QA, and another “half-cooked” to accommodate player feedback.
According to Steam, the Early Access program allows developers to sell their game on Steam “while it is being developed,” and provides context to customers that a game should be considered “unfinished” in its current state. There aren’t any hard guidelines, just rules on what developers aren’t allowed to do while releasing a game in this fashion.
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Under those terms, even if Krafton felt the game needed more content before launch, one could reasonably state that so long as the met Steam’s release guidelines, it could be “ready” to release in Early Access in 2025.
Krafton has promised to commit to “fair and equitable” compensation for the developers at Unknown Worlds, and that the company will “provide the rewards they were promised.” When reached for comment, a Krafton spokesperson declined to provide further statements on the situation.