An unexpected turn of events surrounding Subnautica 2‘s development has led to legal action involving the recently fired co-founders. Well, this could be one of the more out-of-nowhere stories involving game development to come about this month. Unknown Worlds, the studio behind the first Subnautica game, which was a breakout hit for the indie studio, having sold over 6 million units, was sold to Krafton (inZOi, PUBG, The Callisto Protocol) in 2018 for $500 million. Co-founders Charlie Cleveland and Max McGuire, along with CEO Ted Gill, were all fired last week by the publisher, who then placed Striking Distance Studios (The Callisto Protocol, Redacted) CEO Steve Papoutsis as Unknown Worlds’ new leader. Papoutsis replaced Glen A. Schofield, who left Striking Distance Studios following the disastrous launch of The Callisto Protocol.
Per Krafton:
“There is nothing more important than the gamer experience. Given the anticipation around Subnautica 2, we owe our players nothing less than the best possible game, as soon as possible. We are thrilled Steve is joining us in our shared commitment at KRAFTON and Unknown Worlds to deliver Subnautica 2 as a more complete and satisfying entry in the series—one that truly lives up to player expectations.”
CH Kim, KRAFTON CEO
While Krafton did not elaborate on why the previous leader team had been fired in its first statement on the matter, it has come to light that there was a $250 million payout bonus at stake. According to initial reports (per Bloomberg), the bonus was to be paid if the studio hit certain milestones, but it’s been said that Krafton pushed back the release date in order to avoid committing to the payout. Cleveland has taken to Reddit (1, 2), telling his side of the story and defending his team’s reputation, along with saying that Subnautica 2 is ready for early release, something that Krafton denies.
“We know that the game is ready for early access release and we know you’re ready to play it. And while we thought this was going to be our decision to make, at least for now, that decision is in Krafton’s hands. And after all these years, to find that I’m no longer able to work at the company I started stings.”
Charlie Cleveland
Krafton has gone on to issue a second statement defending its decisions to fire the trio and push back the second game’s release date. According to the publisher, the team was to get the vast majority of the payout, with a small percentage going to the rest of the studio.
“Specifically, in addition to the initial $500 million purchase price, we allocated approximately 90% of the up to $250 million earn-out compensation to the three former executives, with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.”
Krafton
Krafton continues in its statement that the trio had abandoned their duties as team leaders, leading to missed deadlines and delays, resulting in the game not having enough content for early access. Charlie’s second post on Reddit counters this claim by saying that he, Max, and Ted have consistently shared payouts with the staff and again stating the game is ready for early access: “As I wrote last week, we know in our souls that the game is ready for Early Access – that’s just how we roll.”
“As for the earnout, the idea that Max, Ted and I wanted to keep it all for ourselves is totally untrue. I’m in this industry because I love it, not for riches. Historically we’ve always shared our profits with the team and did the same when we sold the studio.You can be damned sure we’ll continue with the earnout/bonus as well. They deserve it for all their incredible work trying to get this great game into your hands.”
Charlie Cleveland
So, at this point, the three ex-studio heads have pursued legal action and state that a lawsuit has been filed. Some folks on Reddit are already volunteering to give money if they try to seek crowdfunding in an effort to pay for legal fees.