A judge has ordered Krafton to immediately reinstate Ted Gill as CEO of Unknown Worlds, ruling that the parent company breached its contract by firing him to avoid a massive $250 million payout. The court also extended the earnout period for the Subnautica 2 performance bonus until September 15, 2026, effectively stripping Krafton of the operational control it seized following the controversial termination.
A Clear Breach of Contract
The legal ruling confirms that Krafton violated the Equity Purchase Agreement (EPA) by terminating key studio leadership without valid cause. According to the court, the parent company’s primary motivation was to escape a nine-figure liability tied to the sales targets of Subnautica 2. The judge explicitly stated that Krafton went “searching for a pretext” to justify the firing, noting that the “after-acquired evidence doctrine” cannot be used to retroactively manufacture grounds for termination.
Restoring Operational Control
Under the new court order, Gill must be restored to his position immediately, and his authority over the early access launch of Subnautica 2—including access to the Steam platform—must be returned. The court acknowledged the “bad blood” between the two parties but emphasized that this does not excuse a material breach of contract. Furthermore, the judge highlighted that the studio was being mismanaged by a part-time CEO who had never played Subnautica, a situation that had put the future of the franchise in jeopardy.
The Future of Unknown Worlds Leadership
While the judge mandated Gill’s return, the ruling did not formally order the reinstatement of co-founder Max McGuire and director Charlie Cleveland. Instead, the court noted that because these leaders had entrusted their authority to Gill, it is now within his discretion to bring them back to the studio as he sees fit.
Krafton’s Next Steps
Krafton has expressed disagreement with the ruling, stating they are evaluating their legal options. The company noted that the decision does not resolve the pending claims regarding the $250 million earnout, and further litigation remains on the horizon. For now, Krafton maintains that its focus remains on the development of the upcoming title, despite the court’s decision to limit their interference in the studio’s day-to-day operations.
