Krafton settles Unknown Worlds earn-out for more than the disputed $250M after losing in court
Summary
Krafton settled a year-long dispute with Unknown Worlds founders over a $250M earn-out tied to Subnautica 2's revenue targets
Settlement expands bonuses to all current staff including recent hires, paid in three annual installments, plus lifecycle incentives
CEO Ted Gill exits four months after court-ordered reinstatement; external successor to be appointed jointly
Subnautica 2 has sold 4M+ copies in Early Access, making the original earn-out threshold undeniable
"Developers will be compensated significantly more than under the original acquisition agreement"
01
The original earn-out gave Krafton control over its own trigger
Krafton's 2021 acquisition tied a $250M bonus to revenue targets for Subnautica 2's 2025 Early Access release
Bonus eligibility covered only top executives and staff present at the 2021 acquisition
The acquirer controlled the ship date while the acquired team held the financial upside
Any delay past 2025 directly threatened whether the milestone would trigger
02
Krafton lost the case after its own CEO's ChatGPT prompts surfaced
Krafton fired Gill, Cleveland, and McGuire in July 2025; founders alleged the terminations were designed to block the earn-out
Krafton countered that leadership threatened to self-publish Subnautica 2 and downloaded tens of thousands of company files
Testimony revealed Krafton CEO Changhan Kim used ChatGPT to brainstorm ways to avoid the payout
In March 2026 the court ordered Gill reinstated as CEO
Subnautica 2 launched in May 2026 and crossed 4M copies, making the revenue threshold undeniable
03
Settlement costs Krafton more than the original $250M would have
Every current Unknown Worlds employee receives a payout, including hires made after 2021
Total compensation exceeds the original acquisition agreement, paid across three annual installments
Additional incentives are tied to the game's ongoing update cycle, linking payouts to live-ops performance
Unknown Worlds retains development leadership; Krafton committed to supporting the game
A new CEO will be recruited from outside both companies
04
Expanding bonuses to all staff is a retention move, not generosity
Subnautica 2 is still in Early Access with full launch ahead; losing devs now damages a 4M+ copy asset
The original 2021-only eligibility created a two-tier workforce inside the studio
Three-installment structure and lifecycle incentives retain staff through full launch, not just reward past work
"New leadership is the best way for the studio to move forward"
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