Subnautica 2 legal mess continues as rehired CEO argues release announcement was 'damaging'

Rehired CEO argues Krafton acted in 'defiance' of judge's order this week

The legal drama surrounding Subnautica 2 just won't quit. Earlier this week, a judge ordered publisher Krafton to rehire developer Unknown Worlds Entertainment CEO Ted Gill, who, along with other executives, was fired by Krafton last summer. A short time later, Steve Papoutsis — who was installed as the developers' CEO after Gill was originally let go — circulated an internal message announcing Subnautica 2 would release into early access in May, which IGN first reported on Tuesday.

That release window announcement is at the center of the latest addition to this mess. On Thursday, Game File reported that lawyers for Gill and the other fired execs wrote a letter to the judge stating the release window announcement could potentially be "damaging the game and sowing additional confusion among the Subnautica community." The report notes that Gill's issue isn't with the potential May release for the game, but the way the news was presented.

As of Monday morning, Gill was back as CEO of Unknown Worlds Entertainment. Crucially, when the judge ordered Krafton to rehire him, she also ordered the publisher not to obstruct Gill's "authority over the early access launch of Subnautica 2." Papoutsis's memo is the point of contention, as he wouldn't have had the authority to write and share that memo on Tuesday. The lawyers wondered if Krafton had "intentionally leaked" the release announcement message, which it confirmed was real and accurate in a statement to IGN.

Gill's legal team argued that "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." They noted that the release date announcement and all the marketing and fanfare around it should have been pushed by Gill, and Krafton took that opportunity away with a very ho-hum announcement.

Krafton's lawyers responded in a letter of their own that stated: "In his role as CEO, Gill 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."

Shortly after Game File published its report, Gill's lawyers submitted a motion to the judge expressing their consternation over the May launch announcement, Game File reported in an update. They also called upon the judge to order Krafton to explain its actions and why it shouldn't be sanctioned, writing, "Krafton’s actions have undermined the relief sought in this expedited phase of the litigation, in which the Founders spent nine months and millions of dollars fighting to restore their bargained-for right to determine when and how the game would launch."

They note that Krafton continued to confirm the May launch to outlets other than IGN, putting Gill in a bind "before he even had the opportunity to see the developers’ months of hard work to plan a path forward." He had been back as CEO for less than 36 hours by the time news of Subnautica's May early access release started circulating Tuesday evening. In its own filing, Krafton argues against the idea that Gill should have been reinstated as Unknown Worlds' CEO on Monday morning, instead pushing that he shouldn't resume his role as CEO until an "implementing order" is signed.

Gill is now seemingly between a rock and a hard place. He rightfully should have been the one to decide Subnautica 2's release plans and how they'd be announced. But now that the cat is out of the bag, will he really want to renege on a potential May early access launch? Fans have been waiting years for this sequel, after all.

This is something Gill and the legal team are well aware of. "Gill must deal with publishing agreements, launch advertising planning, and other back-end issues. He now needs to do so with the axe of fan disappointment hanging over his head if he changes the launch timing," the motion states.

Then there's the matter of the $250 million potential payout. If Unknown Worlds Entertainment reaches certain revenue targets, it could trigger a massive bonus payout to staff. The payout window has been extended to Sept. 15, though that window could also end up getting extended further.

For now, the latest is that Subnautica 2 will launch in early access sometime in May for Windows PC and Xbox Series X. We'll have to wait and see if Gill and Unknown Worlds end up changing that.