Krafton lawsuit meets Subnautica 2's 2M-copy launch, turning a $250M earnout into gaming's highest-stakes M&A test
Summary
Subnautica 2 sold 2 million copies in 12 hours of early access, peaking at 651,000 concurrent players across all platforms
A Delaware court found Krafton deliberately schemed to remove Unknown Worlds co-founders to block a $250 million earnout
Reinstated CEO Ted Gill used restored authority to ship the sequel, now gaming's most concrete earnout-versus-control precedent
"It would be 'difficult to cancel'"
01
$250M earnout structure hinged on a sequel that just broke records
Krafton acquired Unknown Worlds, whose Subnautica series had accumulated 18.5 million sales before the sequel
The deal included a $250 million earnout tied to revenue targets
Subnautica 2 sold 2 million copies in under 12 hours across Steam, Epic, and Xbox Series X/S
Steam alone peaked above 467,000 concurrent players - nearly 9x the original's all-time peak
Specific earnout trigger conditions remain undisclosed
02
Delaware court reversed Krafton's founder removals and restored studio control
In July 2025, Krafton removed co-founders Cleveland, McGuire, and Gill, alleging they had "downed tools"
The founders refuted those claims; Delaware Court of Chancery found Krafton deliberately schemed to remove all three
A November 2025 pre-trial brief revealed CEO CH Kim formed "Project X" to seize operational control of Unknown Worlds
The same filing disclosed Kim queried ChatGPT on avoiding the earnout
The court reinstated Gill as CEO with "full operational authority" over the studio and the Subnautica 2 release
03
Earnout design lessons for studio founders and gaming M&A investors
Krafton's playbook - removing founders and delaying the game before revenue targets could trigger - was operational interference, not a contract technicality
Delaware ruled this as a deliberate scheme, treating founder removal as an earnout-defeating mechanism
Founder removal rights, game release authority, and earnout triggers must be explicitly cross-referenced as linked provisions in acquisition agreements
Specific earnout conditions in this deal remain undisclosed, limiting full structural analysis
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