In a letter sent to Vice Chancellor Lori Will of Delaware’s Court of Chancery, a lawyer noted that this announcement wasn’t made properly, and that it could end up “damaging the game and sowing additional confusion among the Subnautica community.” The letter also refers to Krafton’s decision as being “self-serving”.

The decision to launch Subnautica 2 into Early Access in May was made by Krafton after Unknown Worlds had hit key development milestones. This was uncovered in a memo from earlier this week, and ended up catching the attention of the lawyers representing co-founder trio Ted Gill, Charlie Cleveland and Max McGuire. They sent a letter about having “serious concerns” with how studio head Steve Papoutsis announced the milestone to developers, noting that he didn’t have the authority to do so.

“Krafton self-servingly announced the launch without any regard to its impact on the game, the team, or the community—let alone this Court’s Opinion,” continued the lawyer’s letter. “Announcing the release of a game is momentous, and it is typically accompanied by significant marketing activity, fanfare, and community coordination. And most importantly, the announcement is carefully designed to maximize excitement for the game. That entire process was supposed to be driven by Mr. Gill. However, in defiance of the Court’s Opinion, Krafton has now taken that away, further damaging the game and sowing additional confusion among the Subnautica community.”

The letter went on to speculate that the memo sent out by Papoutsis had been “internationally leaked” by Krafton. In response, lawyers for the company would offer a new statement, defending Krafton and noting that the memo sent by Papoutsis was simply meant to celebrate the development of Subnautica 2.

“Papoutsis’s message was simply celebrating the UW employees’ efforts toward a past event: Krafton’s pre-Opinion determination that Subnautica 2 was ready for Early Access release. There was nothing improper about conveying the results of the milestone review or thanking the development team for their dedication and talent.”

They went on to note that Gill, having been re-appointed as CEO of Unknown Worlds, will be “able to assess independently his views on the state of Subnautica 2 and the appropriate release schedule; nothing in Papoutsis’s message alters Gill’s authority or discretion.”

For her part, the vice chancellor hasn’t issued any response to either of the letters, at least for now. Gill’s re-appointment was confirmed earlier this week as part of Will’s judgment. The vice chancellor noted that “Krafton breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.”

In the meantime, what this means for Subnautica 2’s May launch window remains to be seen. If the title is indeed ready to hit Early Access, these plans aren’t likely to be changed, and we’ll simply start seeing more marketing about the underwater survival crafting game in the coming weeks and months.

Studio head Steve Papoutsis recently thanked the team and its partners in a new statement. “Over the past nine months, you have worked incredibly hard to bring Subnautica 2 close to the finish line. That effort has resulted in a game we are truly proud of, one that each of us and our partners at Krafton unanimously determined is ready for Early Access release in May.”

The additional time following its delay last year has allowed for more story chapters, new biomes, creatures, and “many other features.” “With this significant progress, we have passed Krafton’s milestone review last week and are now ready to start our open development journey alongside our community. We have full confidence that we have reached a point where we can deliver an experience our players will love.”

Regarding Ted Gill, who was recently reinstated as CEO following a court order, Papoutsis said, “We look forward to working with Ted Gill to support a smooth transition and work toward a successful launch. Our priority is getting this game into the hands of the community that has been eagerly waiting for it—and that means honoring the work you have already done to make that possible.”

The decision comes shortly after Delaware Chancery Court Vice Chancellor Lori W. Will ruled that Krafton fired Gill and co-founders Charlie Cleveland and Max McGuire without valid cause. Alongside reinstatement, he also has authority over the game’s early access release. The trio is also entitled to the previous $250 million payout that Krafton agreed on with its acquisition of the studio, provided it hits certain goals.

That seems a given, especially with reports that Subnautica 2 is the most wishlisted game on Steam, beating out the likes of Forza Horizon 6 and Resident Evil Requiem. For more details on what Unknown Worlds has been working on, check out the new Leviathan here. You can also learn about multiplayer and base-building, with the latter receiving numerous improvements.

Vice Chancellor Lori W. Will stated, “Judgment is entered in favor of Fortis [which represents the Unknown Worlds founders] on its Phase One claims. Krafton breached the EPA by terminating the Key Employees without valid Cause and by improperly seizing operational control of Unknown Worlds.”

The “resolution” from Krafton’s board on July 1st, 2025, has been “declared ineffective to the extent it infringes on Gill’s operational control right.” Not only will Gill be reinstated, but he’ll once again have “authority over the early access launch of Subnautica 2” with the publisher enjoined from firing him. If that wasn’t enough, all of the cofounders are again liable to collect the bonuses from the $250 million payout promised by Krafton as part of its agreement to acquire Unknown Worlds.

The payout collection period has been extended through to September 15th (with room for further extension, if necessary). Why did the court rule in favor of the co-founders? Originally, Krafton fired them for wanting to release Subnautica 2 into early access when it was deemed not ready. However, it later blamed them for “abandoning” Unknown Worlds for other projects and even accused them of stealing confidential data.

According to court documents (as outlined by Kotaku), “Krafton’s newly manufactured justifications for the terminations are pretextual. Cleveland and McGuire had taken on limited roles, but that was long known to and accepted by Krafton. As for the data downloads, the former employees were acting to protect the studio’s work product amid Krafton’s takeover attempt. They kept the data confidential and promptly returned it.

“The earnout formula is highly leveraged. If Unknown Worlds surpasses a revenue threshold of $69.8 million, Krafton must pay $3.12 for each additional dollar of revenue generated, up to the $250 million cap.”

If released by Q4 2025 and selling more than 1.67 million (by its models), the studio would have earned a total payout of $191.8 million (though $242.2 million would have been the “best-case scenario”). “These figures immediately captured the attention of [Krafton] CEO [Changhan] Kim,” wrote the judge. “Kim, who had personally led the acquisition of Unknown Worlds, felt that Krafton had overpaid. He feared that making an earnout payment would earn him a reputation as a ‘pushover.'”

Thus began its campaign, dubbed “Project X,” to fire the trio, including consulting with ChatGPT. Hilariously, even the latter advised it would be “difficult to cancel the earnout.”

Of course, this is only Phase One, and the court has yet to rule on any monetary damages. In a statement to Kotaku, Krafton said it “respectfully” disagreed with the recent ruling and is focused on “pushing out the newly updated version” of Subnautica 2 to players “as soon as possible.”

“Krafton puts players at the heart of every decision, and that will never change. Over the past several months, Krafton and the Unknown Worlds team have worked tirelessly to strengthen the game and prepare it for an Early Access release, with a continued focus on delivering the best possible experience for the Subnautica community. We look forward to pushing out the newly updated version as soon as possible for players.

“While we respectfully disagree with today’s ruling, we are evaluating our options as we determine our path forward. Today’s ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, Krafton’s immediate focus remains unchanged: delivering the best possible game to Subnautica’s fans.”

Amid all this, Subnautica 2 is currently planned to launch in 2026 for Xbox Series X/S (via Game Preview) and PC. It will also be available on day one for Game Pass.

“The most challenging thing that we worked on was actually the system itself,” explains McDonald. “This is a brand new system. I don’t think we’ve seen anything like this in any other survival game.”

Bases in Subnautica 2 are broken down into unique tiles that work alongside adjacent tiles in order to ensure that players have plenty of freedom in how they build out their structures without having to worry about terrain getting in the way. Lu describes the development of these new building mechanics as a “rule-heavy, logic heavy” system. The title’s systems largely moves away from the fixed pieces of Subnautica and Subnautica: Below Zero in favor of what has been described as a “much more sculptural, expressive system.”

According to Lu, the window system in Subnautica 2 has seen massive improvements, with players no longer being constrained to specific shapes. Rather, how windows look will be left entirely up to the player. Similarly, corridors have also been upgraded thanks to the new customization options available to players.

Future plans for the game include offering even more customization options, including colors and more decoration options. The title will also get fully-round rooms in the vein of the original Subnautica.

“I’m really excited just to see what you guys can do,” says Singh. “We’ve built something pretty flexible that will let players really run wild with their imagination. Even in the first two games, you already came up with such amazing ideas and concepts, and I think the whole team is super excited to see what you guys can do. In our minds, this is a collaboration between us and the players.”

The last developer vlog for Subnautica 2 was released back in February, and showed off the upcoming survival crafting game’s multiplayer capabilities, as well as how crossplay would work. While Unknown Worlds has noted that those who prefer the single-player experiences of past games can continue to enjoy it here as well, there will also be hop-in co-op available in Subnautica 2.

Along with this, the studio also spoke about how it has been working on optimizing the performance of Subnautica 2 to ensure that it runs well on a wide variety of hardware. Among these is Steam Deck, which the studio has noted enthusiasm about optimizing for.

Subnautica 2 is slated for release later this year, and will be coming to PC and Xbox Series X/S. While there is no word yet on a possible PS5 version, the studio has also confirmed that it will also be available through Game Pass on day one of release.

Subnautica and Subnautica: Below Zero are slated for a February 17 release on the platform, but the developers haven’t been content with a mere port. Instead, they’ve opted for graphical and gameplay optimizations to deliver a more immersive experience. For starters, they’re both going to hit 1440p when docked and 1080p in handheld mode, while running at a buttery smooth 60 FPS across the board.

Those improvements could work very well with optimizations for the Joy-Con 2 that aim for “precise movement, smooth exploration, and refined interaction”, all of which are great news for a gameplay loop that requires all three for your success.

In a press release, producer Michael Verrette gave a nod to the game’s community of players, acknowledging their role in its success and as the key motivator for bringing the first two games to the Switch 2. “Bringing Subnautica and Subnautica: Below Zero to Nintendo Switch 2 is about welcoming new players into that community, while giving longtime fans a chance to experience these worlds again in a way that feels fresh, smooth, and more immersive.”

Owners of the Switch versions can upgrade their copies for free via an Upgrade Pack. The announcement comes hot on the heels of a Dev Diary that showed off Subnautica 2’s multiplayer features ahead of its release.

According to Alinea Analytics’ Rhys Elliott, it’s Unknown Worlds’ Subnautica 2, which recently outlined how co-op would work. Despite the troubled development period, especially with Krafton and the studio’s founders embroiled in a lawsuit, it’s reportedly garnered 3.8 million wishlists. While not surprising (since the original and Subnautica: Below Zero sold millions of copies each), Elliott notes that it’s also “been available for wishlisting since November 2024.”

Compare that to Forza Horizon 6, which became available to wishlist back in September 2025, and is reportedly already at 2.6 million. That’s not all – since pre-orders became available, it’s allegedly sold 220,000 copies on Steam, netting $13 million in revenue.

As for Resident Evil Requiem, it’s only barely behind at 2.5 million wishlists. The reveal of Leon S. Kennedy has seemingly had a knock-on effect, as Elliott notes that 39 percent of those wishlisted also played Resident Evil 4 remake. While Capcom previously stated that it won’t release a demo, you can’t help but wonder if a last-minute pivot wouldn’t cause interest to spike even further.

Subnautica 2 enters early access this year for Xbox Series X/S and PC. Resident Evil Requiem launches on February 27th for PS5, Xbox Series X/S, PC, and Nintendo Switch 2. Forza Horizon 6 arrives on May 19th for Xbox Series X/S and PC, with the PS5 version set for later this year.

The folks over at Unknown Worlds Entertainment have just released a new developer diary where they showcase how multiplayer has been worked into the gameplay loop that we know and love. They’re emphatic about the game being a single-player experience for those who want it, while the option to hop into a session with your buddies is always at your disposal. Throw in cross-platform play into the mix, along with dedicated lists giving you access to your fellow players at your fingertips, and you have yourself a seamless multiplayer experience that could be a new source of some fond memories.

The team was also quite enthusiastic about optimisations for handheld devices, and the Steam Deck comes highly recommended for running this one. All in all, it seems that Subnautica 2 is going full steam ahead, leaving the troubles of last year behind as it builds up to its 2026 debut. It’s hitting early access later this year for PC and Xbox Series X|S, but you can also check it out on day one through Game Pass.

At court, Gill also said “absolutely, yes” when asked whether he would like to be reinstated as the CEO of the studio. The reasons behind this, according to Gill, are to steer the launch of Subnautica 2, the production of a Subnautica movie, which was seemingly being worked on by Cleveland, and to release the secret game, which was being developed under the codename Project Labrador.

“We’ve been working tirelessly for three and a half years on Subnautica 2. The release was imminent,” Gill said in reference to the originally planned Early Access launch of the title earlier this year. “And to have that just taken from you at the last moment is hard.” He also noted that “Charlie had no role” when it came to the development of Subnautica 2.

“But there’s many other aspects too,” Gill continued. “I want to see the Subnautica film as a fan. We were making great progress. I want it to see the light of day. I would love to push that forward.”

“Similarly, as I mentioned, we were a multiproject studio. There’s another game that we had a code name called Project Labrador that we were working on that I’m really passionate about. I want to see that game come to light too.”

In its own statement to GamesRadar, Krafton spoke about the decision to push back the release of Subnautica 2 as being its way of ensuring that it is “the best possible experience to our players.” The company also doubled down on its previously-noted “absence of core leadership” from the three co-founders by mentioning them wanting to be reinstated in their positions at Unknown Worlds.

“The trial is currently ongoing where we are making the case that the decisions we have made were all about ensuring the best possible experience for our players. As we have made clear – we were forced to make a change when the former leaders showed little interest in the development of Subnautica 2, which has always been our top priority.”

“Now, this trial comes down to plaintiffs asking to be restored to jobs they were not doing, said they had no interest in doing, and had previously declined requests that they come back and do those jobs. We look forward to continuing to present our evidence before the judge and are confident we will prevail and be allowed to continue our incredible progress.”

Earlier this week, the three co-founders had also accused Krafton CEO Changham Kim of using ChatGPT to try and figure out a way of getting out of the earn-out that was promised to Unknown Worlds and its co-founders as part of the company acquiring the studio.

According to the brief, Krafton CEO Changham Kim was “desperate” to avoid paying the bonuses to Unknown Worlds related to the originally-planned Early Access release of Subnautica 2. This desperation was seemingly so that Kim could avoid the “professional embarrassment” of being perceived as having overpaid for the studio when Krafton had acquired Unknown Worlds.

“Desperate to avoid such a professional embarrassment, Kim obsessed over finding a way to avoid Krafton’s obligation to pay the earn-out,” reads the brief. “[Krafton’s global head of corporate development Maria Park] told Kim that ‘it seems to be highly likely that the earn-out will still be paid if the sales goal is achieved regardless of the dismissal with cause.’ Kim turned to artificial intelligence to help him brainstorm ways to avoid paying the earn-out. ChatGPT likewise advised that it would be ‘difficult to cancel the earn-out.’ But Kim was undeterred.”

The brief goes on to allege that this ultimately prompted Krafton to push back the Early Access release of Subnautica 2 to a later date, which would also end up pushing the release outside the window to which the bonus earn-outs were tied. “”That way, Krafton could avoid paying the earn-out, but still profit from the game’s eventual hit sales,” continues the brief.

The lawsuit first emerged with the three co-founders announcing that they would be pursuing legal action against Krafton for delaying the Early Access release of Subnautica 2, as well as the publisher blaming an “absence of core leadership” at the studio, which also led to the publisher replacing the studio’s leadership with Striking Distance CEO Steve Papoutsis taking over.

Krafton had in turn accused the three co-founders of abandoning the studio, as well as downloading confidential data. In its own filing, the publisher had accused the trio of having “resorted to litigation to demand a multimillion-dollar payday they haven’t earned” rather than working with the studio to meet the conditions necessary for the earn-out. The publisher also noted that the co-founders had presented themselves as “the visionaries behind Unknown Worlds Success and they key to its future” in the negotiations part of the company’s acquisition of the studio.

Back in September, Cleveland, Gill and McGuire had also accused Krafton of “pivoting to a new theory” in the middle of litigation. The trio said in a new filing that the company “terminated the Founders and seized control because the Founders backed up files they were entitled to access in their work for Unknown Worlds.”

For its part, Unknown Worlds has largely stayed out of the fight, electing instead to continue its work on Subnautica 2. September saw the studio releasing a new developer vlog that showcased one of the new Leviathans that will be making their debut in the game when it comes out in 2026.

According to the trio, Krafton’s original allegation revolved around firing the three of them because of their “supposed intention to proceed with a premature release of Subnautica 2.” Due to this, Krafton also allegedly “withdrawn game readiness as a grounds to justify its actions.”

Further in the statement, they note that the company has “pivoted to a new theory that it admittedly came up with only after the fact: that it terminated the Founders and seized control because the Founders backed up files they were entitled to access in their work for Unknown Worlds.”

“Krafton’s disorganized retreat raises more questions than answers,” noted the three in their filing. “To say Krafton’s new theory is a Hail Mary would be an understatement – both because the downloads were not wrongful and because Krafton claims not to have learned of them until after it had fired the Founders. The downloads cannot have been the actual motivation for termination.”

The statement, which had the three request that the court should deny Krafton’s request for a forensic inspection, ultimately led to the court doing so. Their statement noted that this request came on the grounds of the company’s “shift in theories”. The court denied Krafton’s forensic inspection request without prejudice back in September 12. The fact that it was denied “without prejudice” means that Krafton could try for another forensic inspection request down the line.

While this lawsuit has been going on from back in July, with the three co-founders accusing Krafton of a “months-long” campaign to delay the Early Access release of Subnautica 2. The title, originally slated for release this year, was pushed back to 2026, with Krafton noting that it wasn’t yet ready for release. The decision also led to the ousting of the three co-founders, who insisted that it was, in fact, ready for release.

Later in July, the current CEO of Unknown Worlds, Steve Papoutsis, spoke about the lawsuit, noting that, contrary to the allegations by the co-founders, he didn’t see Krafton as withholding money it owed to the studio and the three co-founders.

“I don’t think that’s the case,” said Papoutsis. “Personally, what was presented to me when I was asked to participate and help the team was nothing but encouragement for making a great game from Krafton.”

“A commitment to players, a commitment to the creative process, a commitment to ensuring that, when we do choose to go to Early Access, it meets players’ expectations. That is all that’s ever been discussed to me, and that is a huge part of why I felt good about stepping in and accepting this opportunity.”

Subnautica 2 recently got a new developer vlog that showcased one of its new additions: the Collector Leviathan.