If someone had tried to forecast the major events in the gaming world for 2025 during the year’s opening months, few would’ve anticipated the current controversy surrounding Subnautica 2. The dispute between developer Unknown Worlds and parent company KRAFTON has dominated headlines, escalating through accusations, delays, and legal actions.

KRAFTON recently acknowledged the authenticity of an internal development report for Subnautica 2 that surfaced online. The company stated it sought to “curb misinformation” by confirming the document’s validity, as reported by Eurogamer. This move, however, appears aimed at strengthening KRAFTON’s narrative rather than merely addressing rumors.

Initial plans in late 2023 suggested a June 2025 early access launch for Subnautica 2. The game’s official 2024 unveiling reinforced this timeline. Yet, as the target date passed without release, tensions erupted publicly.

• On July 2, 2025, KRAFTON terminated the employment of Unknown Worlds’ three co-founders—Charlie Cleveland, Ted Gill, and Max McGuire—reassigning leadership to Steve Papoutsis, ex-head of Striking Distance Studios.

  KRAFTON’s initial statement framed the exits as mutual, wishing the trio well and emphasizing Papoutsis’ credentials. “Player satisfaction remains our top priority,” the company added without elaborating on the abrupt leadership shift.

• By July 3, Unknown Worlds attempted to calm fan concerns, insisting Subnautica 2’s development remained stable despite the founders’ departure.
• Cleveland’s July 4 social media post countered this, labeling the exits “unexpected” and asserting the game was “prepared for early access” at the time of his dismissal.
• Bloomberg’s July 9 exposé alleged a delay pushing Subnautica 2 to 2026, potentially costing Unknown Worlds a $250M performance bonus tied to 2025 revenue targets. Sources described these goals as “unreachable” without a 2025 launch. Internal critiques from Papoutsis cited inadequate content as justification for postponement.

  Hours later, Unknown Worlds attributed the delay to playtest feedback, while KRAFTON denied financial motives, stating the decision prioritized “quality.”

• KRAFTON escalated matters on July 10, accusing the founders of neglecting duties and prioritizing personal projects. The company claimed 90% of the bonus would’ve gone to Cleveland, Gill, and McGuire, with 10% split among staff.
• The same day, Cleveland announced a lawsuit against KRAFTON for alleged contractual breaches, refuting bonus distribution claims. He noted past profit-sharing practices during the studio’s 2021 acquisition. Journalist Jason Schreier confirmed the suit targeted “unfulfilled obligations.”
• Leaked internal slides on July 11 criticized Subnautica 2’s “insufficient polish” and scaled-back content, concluding the project needed timeline revisions. One slide emphasized a gap between current progress and initial expectations.

On July 13, KRAFTON verified the leaked documents, citing a need for transparency. The company described the materials as part of routine milestone reviews to ensure “alignment with creative and quality benchmarks.” It reaffirmed collaboration with Unknown Worlds to meet fan expectations.

Throughout statements, KRAFTON positions itself as player-focused, framing delays as quality-driven. Validating the leaks bolsters its argument against readiness while potentially swaying public sentiment ahead of legal proceedings. However, questions linger about the founders’ alleged negligence and KRAFTON’s financial motivations. Cleveland’s legal team has yet to respond to the latest developments.

As the saga unfolds, further updates will shed light on contractual disputes and the game’s revised trajectory. For now, the future of Subnautica 2 remains entangled in corporate and creative discord.