Judge Orders Krafton to Reinstate Fired Subnautica 2 Devs and CEO, Reviving $250 Million Bonus Deal

A judge has ruled that Krafton must immediately reinstate Unknown Worlds CEO Ted Gill and key Subnautica 2 developers with “full operating authority”, overturning their July 2025 dismissals and reviving a $250 million bonus package originally linked to the studio’s sale to Krafton.

In a landmark legal decision on March 16, 2026, a court sided decisively with Unknown Worlds Entertainment in its high-profile dispute against South Korean video game publisher Krafton. The judgment directs Krafton to reinstate CEO Ted Gill, who was terminated in July 2025, and restore him as chief executive with full control of both the studio and the Subnautica 2 Early Access release, as well as operational control over the Steam launch platform. This order follows the court’s findings that Krafton had violated the Equity Purchase Agreement (EPA) by “terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.”

According to the ruling, the board resolution that ousted Gill and his colleagues has been declared “ineffective,” leaving Krafton legally obligated to revert all decisions related to their termination. The reinstated management team is also entitled to an extended period for the $250 million bonus payout, a significant element of the original acquisition deal between Unknown Worlds and Krafton. These incentives are again accessible to the studio’s co-founders, who were previously excluded when Krafton replaced them.

The judge’s written decision states: Krafton breached the EPA by “terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.” The order further specifies that “full operating authority” must be restored to Gill for both Unknown Worlds and the Steam Early Access release of Subnautica 2. The board action that removed Gill and the named co-founders was declared “ineffective.” These rulings decisively return control of the studio and its flagship project to the original developers.

Krafton’s official reasoning at the time of the firings was that the executives and developers had “abandoned their responsibilities.” In response, the ousted devs argued they had not resigned or left voluntarily, but were instead “pushed out” in what they believed was an attempt “to avoid paying the $250 million bonus.”

Following the forced departures, Krafton installed Steve Papoutsis to lead Unknown Worlds. Papoutsis was already acting as CEO of Striking Distance, another Krafton subsidiary. His management tenure is now expected to conclude as Gill and the original co-founders reclaim “full operating authority.”

This court-ordered leadership reversal comes at a critical moment for Subnautica 2’s development cycle. With Gill reinstated, oversight of the game’s Early Access release on Steam will revert to the original team. The restoration of the $250 million bonus package also reestablishes major financial incentives for the founding developers, extending eligibility through at least the end of 2026.

Industry analysts note that this case underscores the strength of developer protections in acquisition contracts and highlights the legal risks of abrupt leadership changes by acquirers. The court’s decision affirms that pre-agreed payout terms remain enforceable, despite attempts at managerial restructuring. Fans and investors are now anticipating further updates as Unknown Worlds resumes work on Subnautica 2 under its founding leadership.

The legal proceedings are ongoing, with this judgment representing only the first phase in the wider dispute. More details are expected as case documents become public and parties respond to the ruling.