A Delaware Chancery Court judge has ordered Krafton to reinstate Unknown Worlds Entertainment CEO Ted Gill after ruling the publisher breached its acquisition agreement by firing key studio leaders “without valid cause” and seizing operational control of Subnautica 2. The decision doesn’t just put Gill back in the chair—it explicitly returns his authority over Subnautica 2’s Early Access launch plans and extends the window for a contentious $250 million earnout that Krafton allegedly tried to dodge.
And yes, the ruling also spotlights a jaw-dropping detail: the judge says Krafton CEO Changhan Kim consulted ChatGPT while crafting a “takeover strategy” aimed at avoiding that nine-figure payout—an AI-assisted play that the court ultimately deemed a breach of contract.
A Delaware judge just handed Unknown Worlds a massive win
Vice Chancellor Lori W. Will of the Delaware Chancery Court entered judgment in favor of Fortis Advisors LLC (representing the former Unknown Worlds shareholders/leaders) on what’s described as “Phase One” claims. The core finding is blunt: Krafton breached the Equity Purchase Agreement (EPA) by terminating the “Key Employees” without valid cause and by improperly taking operational control of Unknown Worlds.
The practical consequences are even bigger than the headline:
- Ted Gill is reinstated as CEO of Unknown Worlds Entertainment.
- Krafton must not obstruct Gill’s authority over the Early Access launch of Subnautica 2.
- The court declared Krafton’s July 1, 2025 board resolution (the one used to remove leadership) ineffective to the extent it infringes on Gill’s operational control rights.
- Krafton must immediately restore Gill’s access to the Steam platform—a key detail because Steam control is effectively launch control for a PC-first Early Access game.
The judge also acknowledged the obvious: forcing a parent company to reinstall the executive it just fired is going to be tense. But the court’s position is that “bad blood” doesn’t excuse a material contract breach, and that both parties “can—and must—act in good faith” going forward.
That’s the legal system saying, in polite corporate language: you signed the deal, live with it.
The $250 million earnout is back on the table—and the clock gets extended
This entire saga has been orbiting a single gravitational force: a $250 million earnout/bonus tied to Unknown Worlds hitting revenue targets connected to Subnautica 2’s Early Access release.
Here’s what’s been laid out in the court’s discussion of the deal terms:
- Krafton acquired Unknown Worlds in 2021 for a $500 million equity payout, with up to $250 million additional earnout if certain goals were met by the end of 2025.
- The earnout formula is described as “highly leveraged.” Once Unknown Worlds surpassed a $69.8 million revenue threshold, Krafton would owe $3.12 per additional dollar of revenue, up to the $250 million cap.
The judge’s remedy includes extending the earnout period. The leadership team now has until September 15, 2026 to meet the contractual demands and potentially collect the payout, with the ruling also leaving room for a further extension.
That extension matters for one reason: Subnautica 2’s Early Access timing. The game had been expected to hit Early Access in 2025, but the legal battle and Krafton’s actions pushed it off that track. Extending the window is the court’s way of preventing a scenario where a delayed launch conveniently makes the earnout mathematically impossible.
The ruling paints Krafton’s motive as financial—and calls out “Project X”
The most damning passages in the decision aren’t about workplace drama or creative differences. They’re about money, and the court’s view that Krafton’s actions were designed to avoid paying what it owed.
The judge wrote that Krafton’s “true focus” in June 2025 was avoiding “financial exposure,” and that it knew Subnautica 2 was poised to trigger the earnout. The ruling describes an internal initiative dubbed “Project X”—a task force allegedly created to either force a renegotiation (“deal”) on the earnout or execute a studio takeover.
In the court’s framing, terminating the founders and seizing control wasn’t an unfortunate byproduct of a quality dispute. It was a tactic.
That’s a brutal characterization for any publisher—especially one that owns the studio outright. Because it implies the problem wasn’t the game. The problem was the contract.
Yes, ChatGPT is in the ruling—and it’s as ugly as it sounds
The detail that’s going to ricochet across the industry isn’t just that Krafton lost. It’s how the judge says Krafton’s CEO approached the situation.
According to the court’s opinion, Krafton CEO Changhan Kim consulted an “artificial intelligence chatbot” (specifically ChatGPT) while looking for ways to escape or undermine the earnout obligations and plan a corporate takeover strategy. The ruling describes Kim turning to ChatGPT after being warned internally that firing the founders without cause wouldn’t void the earnout and could trigger a lawsuit.
Even more surreal: the judge notes that ChatGPT itself responded that canceling the earnout would be “difficult,” yet the company allegedly proceeded with a strategy aligned with the chatbot’s recommendations anyway—down to a “Response Strategy to a ‘No-Deal’ Scenario,” including a “pressure and leverage package” and an “implementation roadmap.”
If you’re wondering why this matters beyond the meme value: it’s not just embarrassing. It’s a cautionary tale about executives treating generative AI like a legal strategy engine—then acting on it in a high-stakes corporate dispute involving employment terminations, platform control, and a nine-figure payout.
Krafton’s shifting justifications didn’t survive scrutiny
Krafton’s defense, as described in the reporting and reflected in the court’s evaluation, shifted over time.
Initially, Krafton claimed the leadership was fired because Subnautica 2 wasn’t ready for Early Access. Later, Krafton argued the founders had “abandoned” responsibilities for other projects, and also alleged they downloaded tens of thousands of company files and emails before termination—claims the founders deny.
The judge rejected those rationales as “pretextual,” stating that Cleveland and McGuire had taken on limited roles in a way that was known to and accepted by Krafton. On the data downloads, the court noted Krafton discovered them after the terminations (placing them under “after-acquired evidence” doctrine) and concluded Krafton still failed to prove the downloads were an independent basis for termination.
In other words: even if Krafton found something later that looked bad, the court wasn’t convinced it justified what Krafton already did—or that it met the contractual standard for firing “for cause.”
What this means for Subnautica 2’s Early Access release plans
The immediate impact on Subnautica 2 is straightforward: the person the court says has operational control—Ted Gill—is back, and Krafton is ordered not to interfere with his authority over the Early Access launch.
But the release date situation is still messy.
- Subnautica 2 currently has no confirmed Early Access launch date.
- It is planned to launch in 2026 for PC and Xbox Series X|S (via Xbox Game Preview).
- It will be available day one on Game Pass, per previously stated plans.
There’s also a key tension here that fans shouldn’t ignore: Krafton has publicly maintained that delays were about quality and preparing a “newly updated version” for Early Access “as soon as possible.” Meanwhile, director/co-founder Charlie Cleveland previously said the studio believed the game was ready for Early Access release and that players were ready to play it.
Now that Gill’s authority has been restored, the big question becomes whether Unknown Worlds pushes to get Early Access out the door faster—or whether the last several months of disruption (leadership upheaval, platform control fights, litigation) have already forced a different schedule.
The court order restores control. It doesn’t magically restore time.
Krafton responds: disagreement, options, and “further litigation still pending”
Krafton’s public stance is defiant but careful. In a statement, the company said:
“While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward. Today’s ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending.”
Krafton also emphasized that it has been working with the Unknown Worlds team to strengthen the game and prepare it for Early Access, reiterating its intent to release an updated version as soon as possible.
The key takeaway: this ruling is a major turning point, but it’s not the end. The court has not yet ruled on monetary damages—and Krafton is openly considering next steps, which could include appeal or additional legal maneuvering.
Why this case should worry every studio under a publisher umbrella
Even if you don’t care about corporate law, this is the kind of case that makes developers sit up straight.
Subnautica 2 isn’t some niche experiment—it’s one of the most-wishlisted games on Steam, a sequel to a modern survival classic, and a tentpole project for a studio with a proven track record. If a publisher can allegedly attempt to reroute platform access, seize operational control, and remove leadership in the shadow of a looming earnout, that’s a scenario every acquisition contract has to plan for.
And the judge’s language here is the real thunderclap. The ruling doesn’t read like a neutral shrug. It reads like a court that believes it saw a deliberate strategy to avoid paying what was negotiated—right down to internal codenames and AI-assisted planning.
The industry has spent years normalizing acquisitions with earnouts and performance triggers. This is what happens when those triggers get close to paying out and incentives turn toxic.
What Remains Unknown
- Will Krafton appeal the Delaware Chancery Court ruling, and if so, how quickly?
- When will Subnautica 2 enter Early Access on Steam now that Gill’s authority has been restored?
- How will Unknown Worlds’ internal leadership structure look day-to-day after Gill’s reinstatement, especially given the “bad blood” acknowledged by the judge?
- What happens in “Phase Two” of the litigation regarding damages and any additional remedies?
- Whether the earnout window will be extended further beyond September 15, 2026, as the ruling suggests may be possible.
