High-Stakes Legal Battle: Unknown Worlds Sues Former Execs Over Massive Data Theft and Press Leaks, Jeopardizing Subnautica 2’s Future

The development studio behind the critically acclaimed survival franchise, Subnautica, Unknown Worlds Entertainment, has escalated its internal conflict into a significant legal skirmish. The studio has filed a comprehensive lawsuit against three of its former key executives—including co-founder and former creative director Charlie Cleveland, former CEO Ted Gill, and co-founder/former CTO Max McGuire—alleging a massive, coordinated theft of confidential company data and its subsequent improper disclosure to the media. This lawsuit adds a dramatic new layer to an already complex legal dispute involving Unknown Worlds’ parent company, KRAFTON, and the former leadership team, centering largely around the highly anticipated sequel, Subnautica 2.

The Allegations: Confidential Documents and Sabotage

The core of the lawsuit, filed by Unknown Worlds, is the claim that the three executives, shortly before their termination, systematically downloaded tens of thousands of sensitive company files. This alleged data theft is viewed as a severe breach of their confidentiality and fiduciary duties to the studio, posing a direct threat to the company’s intellectual property and its business interests. The documents reportedly stolen encompass a vast range of proprietary information:

• Game Design Files: Including concepts, development assets, and design documents for Subnautica 2.
• Intellectual Property (IP) Data: Files related to the core Subnautica franchise and other studio projects, such as Moonbreaker.
• Business Records: Sensitive financial and operational documents.
• Confidential Correspondence: Full exports of executive email accounts.

The lawsuit details alarming specifics, alleging that Ted Gill twice exported his entire Unknown Worlds email account, triggering IT alerts, and that Charlie Cleveland downloaded over 72,000 files, with his activity abruptly ceasing just minutes before his system access was revoked. Max McGuire is claimed to have downloaded nearly 100,000 files, including data related to the ultimately unsuccessful ‘Moonbreaker’ project. The sheer volume of the alleged downloads—totaling over 172,000 files—underscores the seriousness of the company’s claim of corporate espionage.

Weaponizing Information: Disclosing Data to the Press

Beyond the simple act of theft, a crucial and highly damaging allegation is the improper disclosure of this confidential information to members of the press. Unknown Worlds argues that the former executives used these documents to bolster their own prior lawsuit against KRAFTON, which accused the parent company of intentionally delaying the release of Subnautica 2 to avoid paying a substantial $250 million earnout bonus tied to the game’s 2025 Early Access release. The current suit claims this public disclosure was intended to “harm Unknown Worlds and jeopardize the future of the Subnautica franchise,” seeking to sway public opinion and media coverage in their favor.

The lawsuit explicitly links the confidential data to efforts to “publicize their claims against KRAFTON,” thereby leveraging internal company secrets as a weapon in their personal legal battle. This development raises the stakes considerably, shifting the focus from a financial dispute over an earnout to a conflict over the integrity of the studio’s trade secrets and the security of the highly valuable Subnautica IP.

The $250 Million Earnout: The Root of the Conflict

The entire, sprawling legal dispute traces its roots back to the acquisition of Unknown Worlds by KRAFTON and a performance-based incentive plan for the founders. The original legal complaint by the former executives alleged that KRAFTON orchestrated a “months-long campaign to delay Subnautica 2’s release” to push it past the milestone deadline, thus avoiding the massive bonus payment. They maintained that the game was ready for its 2025 Early Access launch. KRAFTON, and now Unknown Worlds, counter-claim that the executives were pushing for a premature release for personal financial gain, despite the game reportedly falling “far short” of internal quality expectations. This critical disagreement over the game’s readiness and the motive for its delay is the financial fulcrum upon which the entire legal edifice rests.

Impact on Subnautica 2 and the Gaming Industry

This unprecedented internal legal conflict poses significant concerns for the future of Subnautica 2’s development. Key personnel departures, combined with a messy legal battle over confidential design and code, create an environment of profound instability. Fans of the franchise, who are eagerly awaiting the next chapter of the deep-sea survival game, are now faced with news of a studio in turmoil, potentially impacting the game’s quality and release schedule, which KRAFTON has already pushed back to 2026.

The lawsuit demands several key forms of relief from the court:

• The immediate return of all stolen company files and confidential materials.
• A court order prohibiting the former executives from further disclosing or utilizing the studio’s trade secrets.
• An award to the studio of “all rights, title, and interests” in any intellectual property, including game code and design, developed by the executives during their employment.
• Financial compensation for the damages caused by the executives’ alleged misconduct.

This is a closely watched case in the global video game industry, particularly concerning executive employment contracts, digital asset security, and the responsibilities of leadership during corporate transitions. The integrity of the Subnautica franchise is now inextricably tied to the outcome of this high-stakes legal confrontation, making this story a flashpoint for discussions around corporate governance and IP protection in the competitive world of AAA game development.