Subnautica 2 Controversy Escalates as Returning CEO Calls for Sanctions Following Early Access Announcement

The protracted legal dispute surrounding Subnautica 2 shows no signs of abating. Earlier this week, a judicial mandate required publisher Krafton to reinstate Ted Gill, the CEO of developer Unknown Worlds Entertainment, following his termination last summer. However, the transition has been anything but smooth. Shortly after the ruling, Steve Papoutsis—who had stepped in as CEO during Gill’s absence—distributed an internal memo suggesting that Subnautica 2 would debut in early access this May, a timeline first disclosed by IGN.

This release announcement has quickly become the latest flashpoint in the ongoing friction. As reported by Game File, Gill’s legal representatives sent a letter to the presiding judge, asserting that the sudden disclosure could “damage the game’s prospects and sow unnecessary confusion within the Subnautica community.” The core of the complaint isn’t the May timeframe itself, but rather the unilateral way the information was disseminated.

By Monday morning, Gill had officially resumed his duties as CEO. Crucially, the court order not only demanded his reinstatement but explicitly prohibited Krafton from interfering with his “authority over the early access launch of Subnautica 2.” The memo penned by Papoutsis is now under scrutiny, as Gill’s team argues he lacked the jurisdiction to issue such a statement. They have gone as far as to question whether Krafton “intentionally leaked” the release window to the press, a move Krafton later validated as accurate in statements to the media.

Gill’s counsel argued that “Krafton self-servingly broadcast the launch without regard for its impact on the project, the staff, or the community—let alone the court’s decision.” They emphasized that a milestone as significant as a release date should be part of a coordinated marketing campaign led by Gill, rather than a “ho-hum” internal leak that stripped the CEO of his strategic oversight.

In a formal rebuttal, Krafton’s lawyers maintained that Gill’s executive power remains intact: “In his capacity as CEO, Gill will be able to independently evaluate the status of Subnautica 2 and determine the optimal release schedule; nothing in the previous messaging diminishes his authority or discretion.”

Following these developments, Gill’s lawyers filed a motion expressing their exasperation over the May announcement, according to a report update from Game File. They urged the judge to demand an explanation from Krafton and consider sanctions, stating that the publisher’s actions “undermined the relief sought in this litigation, where the founders spent nine months and millions of dollars to regain their right to determine the game’s trajectory.”

The motion notes that Gill was back in office for less than 36 hours before the news of the May launch began to circulate. This timing put him in an immediate bind, forced to address a schedule he hadn’t yet vetted. Krafton, meanwhile, has countered by arguing that Gill shouldn’t have technically resumed his duties until a final “implementing order” was signed, attempting to push back the timeline of his official return.

Gill now finds himself in a difficult position. While he possesses the legal right to control Subnautica 2‘s release, the public expectation of a May launch creates immense pressure. Retracting that date to assert his authority could lead to widespread fan backlash—a community that has been anticipating this sequel for years.

His legal team highlighted this predicament, noting that Gill must now navigate complex publishing agreements and advertising logistics with “the axe of fan disappointment hanging over his head” if he decides to alter the current schedule.

Compounding the situation is a potential $250 million payout. If Unknown Worlds hits specific revenue benchmarks, a massive bonus pool for staff could be triggered. This financial window is currently set to expire on September 15, though further extensions are possible depending on the outcome of the litigation.

For the time being, the official word remains that Subnautica 2 is slated for a May early access release on Windows PC and Xbox Series X. Whether Gill and his team choose to uphold this date or chart a new course remains to be seen.

Source: Polygon