KRAFTON has rejected allegations made in a lawsuit from Unknown Worlds founders, reiterating assertions that studio co-creators Charlie Cleveland and Max McGuire neglected their responsibilities, allegedly disrupting Subnautica 2’s development timeline as early as July 2023.

Earlier this month, original Subnautica creators Cleveland, McGuire, and Ted Gill initiated legal action against KRAFTON following their termination amid the sequel’s postponement to 2026. A detailed chronology of events leading to the clash, including disputes over creative direction and financial incentives, has been outlined separately.

In its August 12, 2025 court response, KRAFTON maintains that the trio disengaged after the studio’s acquisition, redirecting focus toward personal ventures. The filing alleges Cleveland and McGuire prioritized independent creative pursuits over their studio roles, while Gill allegedly concentrated on securing contractual payouts rather than advancing gameplay quality.

“Post-acquisition, Cleveland and McGuire withdrew from core development duties to chase personal hobbies,” states the document. “Meanwhile, Gill exploited administrative authority to inflate bonus metrics instead of ensuring Subnautica 2’s success.”

KRAFTON further contends that Cleveland shifted his career toward film production, citing internal communications where he reportedly acknowledged plans to step back from leadership responsibilities long before production began. Subnautica 2’s development lead allegedly warned in early 2025 that progress lagged significantly, humorously estimating a 30-year completion timeline at existing speeds.

Legal proceedings will determine the validity of competing narratives, as both parties present contradictory evidence regarding leadership accountability and project management. Observers await clarity on whether studio veterans truly disengaged from development or if corporate interests influenced the conflict.