Subnautica developer and Krafton subsidiary Unknown Worlds is suing its former leaders (who have already sued Krafton) for allegedly abandoning their "fiduciary duties" and downloading (and keeping) confidential company information.
A redacted public version of the lawsuit—filed on August 15 in the Court of Chancery in Delaware—was sent to Game Developer by Krafton's public relations team and claims former Unknown Worlds execs Charlie Cleveland, Max McGuire, and Ted Gill became disinterested in developing Subnautica 2 and instead chose to stop working on the game. Notably, it also accuses them of downloading over 170,000 confidential company files before their employment was terminated.
If those allegations sound familiar, it's because they chime with claims made by Krafton in its response to the lawsuit filed against the South Korean publisher by Cleveland, McGuire, and Gill. That lawsuit was filed after all three were ousted from the company.
The execs allege that Krafton is stalling the early access launch of Subnautica 2 to avoid paying a massive $250 million revenue-based earnout tied to the sequel's success. They claim Subnautica 2 is ready for early access.
Krafton begs to differ and recently said the trio chose to prioritize their own 'monetary interests' over the best interests of the franchise. The legal war of words is becoming increasingly heated.
In its lawsuit, Unknown Worlds claims Cleveland, McGuire, and Gill downloaded "substantial volumes" of undisclosed confidential company information on their way out of the door.
"McGuire and Cleveland grew more active in the week before their threatened termination. McGuire downloaded 99,902 Company files in the days leading up to his termination, and Cleveland downloaded 72,140 Company files," the lawsuit states.
"Cleveland was stopped in the middle of his activity: His last download from the Company’s system occurred just eight minutes before the Company terminated his system access. These downloads were, by far, the largest downloads for each of the three Key Employees at any time since at least 2022."
Unknown Worlds said those downloads included confidential information of "nearly every type" including business records, intellectual property, internal communications, Subnautica concepts, game design files and other items that were redacted in the public version of the lawsuit.
"The scope of the projected release was degraded time and time again"
Unknown Worlds also restated claims that at least two of the aforementioned leaders "checked out" in all but name.
"Cleveland was the first to stray," reads the lawsuit. "Despite publicly holding himself out as the Chief Executive Officer and Game Director of Unknown Worlds, he was gradually becoming disengaged. In 2022, the lead developer on Subnautica 2—a franchise and project supposed to be led by Cleveland—openly complained that the project had no creative leadership, and 'I haven't been able to get much of Charlie's time lately and sort of don't know what he really thinks or wants to hear.'"
"By 2023, Cleveland announced to friends and some colleagues that he was leaving videogame development to learn how to produce movies and explore other interests. He later changed his LinkedIn profile to “part-time” and, by 2024, he abandoned all creative or other leadership roles with the Company."
Unknown Worlds then alleges that McGuire became buried in his passion project, Moonbreaker, even after the turn-based strategy title (also developed by Unknown Worlds and published by Krafton) had been deemed a "commercial failure."
"Eventually he, too, abandoned any pretense of technical involvement in Subnautica 2. Gill, who assumed the role of CEO of Unknown Worlds, was fully aware of the situation—and did nothing" adds the filing.
Unknown Worlds asserts that Gill could not overcome the "complete abdication" of the Subnautica 2 creative and technical leadership team, causing development to stall.
"The release date, initially projected for [REDACTED] was pushed back again and again (three times in all) because the game was nowhere near release," it continues. "Worse, the scope of the projected release was degraded time and time again. What originally was projected to be a limited scope, 'early access' release, was limited to little more than a sandbox."
In short, Unknown Worlds claims all three former leaders pushed for Subnautica 2 to be released before it was ready in pursuit of that seismic earnout. It alleges their termination was a result of that transgression, and ultimately sparked the legal battle we find ourselves watching at this very moment.
Unknown Worlds has requested the court prevent Cleveland, McGuire, and Gill from disclosing its trade secrets, confidential, and proprietary business information or using that information to benefit themselves or a third party. The studio demands that confidential information be returned.
In addition, the company is seeking damages for "wrongful conduct" proved at trial alongside its attorneys' fees, costs, and expenses, as well as pre- and post-judgment interest.
It then wants to be awarded all rights, title and interest in any intellectual property developed by Cleveland, McGuire, and Gill during their employment at Unknown Worlds, including "all movie scripts, movie footage, game design, game code, play tests, or other software development."
You can read the full lawsuit on Scribd.
