Krafton, Unknown Worlds Settle Earnout Dispute Over Subnautica 2; CEO Ted Gill to Step Down

Krafton has reportedly settled its closely watched legal dispute with Unknown Worlds Entertainment, the studio behind Subnautica, ending a yearlong fight over bonus payments tied to Subnautica 2. According to Bloomberg and trade outlets citing its reporting, the agreement calls for bonus or earnout payments to Unknown Worlds staff, with the payouts expanded so that every employee at the studio receives a bonus. Bloomberg also reported that Unknown Worlds CEO Ted Gill is stepping down as part of the deal.

The settlement details now circulating are based on Bloomberg and trade press reports. Research for this article did not identify a public joint statement from the companies or a public settlement filing laying out the terms. Several outlets reported that the bonuses will be paid in three annual installments, but those specifics have not been confirmed in a publicly available settlement document.

At the center of the dispute was an earnout — a contingent payment tied to future performance — worth up to $250 million. Under Krafton’s 2021 acquisition of Unknown Worlds, the South Korean game publisher paid $500 million upfront, with as much as $250 million more available under the Equity Purchase Agreement, according to the Delaware Court of Chancery.

The lawsuit was filed July 10, 2025, by Fortis Advisors LLC, which was acting on behalf of former Unknown Worlds shareholders. The complaint alleged that Krafton breached the acquisition agreement by terminating key employees and taking operational control of the studio, actions the plaintiffs said interfered with the studio’s ability to reach the earnout targets.

That fight took a sharp turn in March. In a March 16, 2026, opinion, the Delaware Court of Chancery — the state business court that handles many corporate disputes — ordered Gill reinstated as CEO and restored his authority over the studio. The court wrote, “Gill is reinstated as CEO of Unknown Worlds with full operational authority… Gill may proceed with the early access release of Subnautica 2 when he deems it appropriate.”

The ruling also extended the earnout and testing period by 258 days. In its opinion, the court said Krafton’s stated reasons for firing the key executives were pretextual and found that the company had carried out a campaign to seize control of Unknown Worlds. The decision gave the plaintiffs a significant win before the case had reached a public damages phase.

The business stakes became clearer after Subnautica 2 entered Early Access in May 2026. Trade reporting has said the game sold more than 4 million copies in its initial release period, and that strong performance is widely seen as the reason the earnout became payable in full or close to it. Those sales figures, like the settlement details, come from trade coverage rather than public court filings cited here.

Gill told Bloomberg, in remarks later reproduced by trade outlets including PC Gamer, “We mutually agreed to part ways.”

The reported agreement appears to bring the public court fight to a close, including the unresolved damages portion of the case. Just as notably, the reported payout structure broadens the benefit beyond top executives or former shareholders. If the reported terms hold, the resolution will stand as a rare example of a videogame-industry earnout battle ending not only with a settlement, but with bonuses distributed across an entire studio.