Photo: Krafton

 

[Alpha Biz= Paul Lee] A U.S. court has ruled that Krafton’s dismissal of the former management of game developer Unknown Worlds—known for the Subnautica series—was unjustified, ordering the reinstatement of its former CEO. Krafton said it disagrees with the decision and signaled further legal action.

On March 16 (local time), the Delaware Court of Chancery ordered the reinstatement of former Unknown Worlds CEO Ted Gill and directed that he be fully restored to “operational control” of the studio as guaranteed under his contract.

Unknown Worlds, acquired by Krafton in 2021, is best known for the 2018 underwater adventure game Subnautica and has been developing Subnautica 2 following the acquisition.

In July last year, Krafton dismissed founding members of the studio, including Charlie Cleveland, Ted Gill and Max McGuire.

At the time, Krafton said the decision was due to the development failing to meet internal quality standards, adding that it believed the existing leadership would not be able to deliver the desired level of quality.

However, the dismissed executives filed a lawsuit seeking $250 million (about 373 billion won) in damages, claiming they were wrongfully terminated as part of an effort to avoid paying performance-based compensation and to seize control of the studio.

The court largely sided with the former executives, ordering Gill’s reinstatement. However, it declined to reinstate Cleveland and McGuire, ruling that restoring Gill alone would be sufficient to return operational control of the studio.

The court also ordered Krafton to immediately restore Gill’s access to the Steam publishing platform, allowing him to proceed with the early access release of Subnautica 2 at his discretion.

In its ruling, the court indicated that Krafton’s dismissal of the executives appeared to be a strategy to avoid potentially hundreds of millions of dollars in performance-based payouts tied to the successful launch of Subnautica 2.

 

 

 

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