During Microsoft’s terrible, no-good, very bad week, it was understandable that some news didn’t warrant as much focus. Dying Light developer Techland cancelled two titles (potentially including its fantasy RPG, though thankfully there were no layoffs). EA is finally shutting down servers for Anthem in January 2026. However, it’s the situation at Unknown Worlds Entertainment, developer of Subnautica, and everything surrounding its upcoming sequel that escalated into something else entirely.
On July 2nd, Krafton, which acquired the developer in 2021 for $500 million, suddenly announced that its leadership – co-founders Ted Gill, Charlie Cleveland, and Max McGuire – had been replaced by Steve Papoutsis “effective immediately.” The latter is known for his work on Dead Space but more recently for heading up Striking Distance Studios of The Callisto Protocol infamy. Papoutsis would become CEO and help “deliver Subnautica 2 as a more complete and satisfying entry in the series—one that truly lives up to player expectations,” per the publisher.
Needless to say, this blindsided the player base. Unknown Worlds had recently begun releasing Dev Vlog videos, and it seemed that early access was on track for launch later this year. We wouldn’t know just how much this decision shocked the former leadership until a few days later. However, perhaps sensing how this all looked, the studio released a statement. While helping Papoutsis transition into his role as CEO, it also assured players that the “day-to-day team” that’s worked on the title over the “last few years remains completely unchanged.”
And after that snafu with Krafton’s financial report, where it said the next Subnautica would be a “multiplayer live-service game,” the studio wanted to reassure you. “It will remain a single-player first experience, with optional co-operative multiplayer. No subscriptions. No loot boxes. No battle pass. No microtransactions.”
However, this was only the beginning as one of the co-founders, Charlie Cleveland, would post on Reddit about how the “team poured their hearts into the game,” and that, “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.” As you’d probably expect, this led to a fresh wave of backlash against the publisher, but things were about to get a whole lot worse.
Bloomberg’s Jason Schreier reported that Subnautica 2’s early access had been delayed to next year “against the wishes” of former leadership. However, the studio was allegedly due to receive a $250 million bonus if it met certain “revenue targets” by the end of 2025. As you’ve probably surmised, delaying early access would mean Unknown Worlds wouldn’t hit those targets and thus wouldn’t receive this bonus, with sources claiming that it would be shared among all employees. Considering this could result in bonuses worth millions, Krafton’s motives were viewed as even more ulterior. Based on what we knew, of course.
Unknown Worlds would subsequently release the first gameplay teaser trailer for Subnautica 2 and officially announced a delay to 2026 for early access. Along with the usual reasons – wanting to implement feedback and improving in some areas – it also cited the need for more content. As such, fans could expect more biomes, tools, creatures, and so on. It’s also still being developed by the same core team, everyone. Please remember that.
This was viewed as damage control by the community, who had begun calling for a boycott of the title. And whether a boycott would be effective or not, a Reddit post with 55,000 upvotes, among everything else, wasn’t the negative press that the studio wanted.
It certainly wasn’t what Krafton sought, and so it took the next unexpected step: Revealing why it replaced leadership in the first place, on its own website at that.
It cited that an overwhelming amount of the $250 million bonus, 90 percent, would go to the studio’s co-founders “with the expectation that they would demonstrate leadership and active involvement in the development of Subnautica 2.” However, Krafton alleges that they “abandoned the responsibilities entrusted to them,” and that the sequel was meant to launch into early access in early 2024, but “The timeline has since been significantly delayed.” It “made multiple requests to Charlie and Max to resume their roles as Game Director and Technical Director, respectively, but both declined to do so.”It even called out the failure of Moonbreaker and how Cleveland was dedicated to working on films instead of focusing on Subnautica 2’s development.
This created “repeated confusion in direction and significant delays in the overall project schedule,” with the publisher feeling “deeply disappointed by the former leadership’s conduct, and above all, we feel a profound sense of betrayal by their failure to honor the trust placed in them by our fans.” This resulted in the “difficult yet necessary decision to change the executive leadership.”
Oh, and don’t worry, as it assured, once again, that Subnautica 2 is developed by a “dedicated core team who share genuine passion, accountability, and commitment to the game.” Furthermore, it promised “fair and equitable compensation for all remaining Unknown Worlds employees who have continuously and tirelessly contributed to Subnautica 2’s development,” reaffirming its “commitment to provide the rewards they were promised.”
Does that mean they’ll receive a piece of the promised $250 million payout after all? Whether it will or won’t, the rollercoaster has yet to stop, as the former co-founders have announced a lawsuit against Krafton, and that the details should become “(at least mostly) public,” per Cleveland. And while not keen on the same, he believes, “This needs to be made right. Subnautica has been my life’s work and I would never willingly abandon it or the amazing team that has poured their hearts into it.” Furthermore, he denied that the co-founders wanted to keep most of the bonus.
“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.”
Schreier would state on ResetEra that no one disputes that Cleveland and McGuire were “barely involved with Subnautica 2.” However, Krafton’s statement about how the game was in terrible shape without their involvement is contradictory to current expectations of things going smoothly now that they’re gone. Granted, it doesn’t quite account for Gill, who was the actual CEO during all this, or how capable Papoutsis is, now that he’s in charge, but it’s worth noting.
There have also been leaked screenshots about content that was allegedly cut for early access had it launched this year. While the legitimacy of the source is up for debate, what isn’t are the actual responses from the studio. Over on its official Discord, community manager Donya Abramo clarified that its statement on the delay was the studio’s and not Krafton’s, and that “The only people who have been working on Subnautica 2 directly are the developers at Unknown Worlds.” There was also the assurance, yet again, that there would be no microtransactions, battle passes, subscriptions or loot boxes. At this point, I want to see this as an official sticker for box art and store listings.
Other statements from the developers include how there are no concerns about the story (which hasn’t seen any rewrites) and that the recent trailer is gameplay and not CGI. For what it’s worth, the team working on the title are still showing transparency to the community. To the extent that they’re able, of course.
To say that everything else is a mess would be an understatement. Is it a case of leadership neglecting its duties? Is Krafton really the evil corporation, the Alterra given form, that everyone is painting it as? At this point, we probably won’t know everything until the actual lawsuit begins. How Subnautica 2 turns out in these conditions remains to be seen, but one thing is for sure: Krafton and Unknown Worlds have an uphill battle to fight in the public eye, never mind having to surpass expectations with early access.
Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.