The Lawsuits Cross Paths
Unknown Worlds, the studio behind Subnautica 2, has filed a lawsuit against its own co-founders: Charlie Cleveland, Adam McGuire, and Ted Gill. The claims are serious: breach of contract, breach of fiduciary duty, and improper use of company data.
At first glance, the move raised questions. Krafton, the Korean publisher that paid around $500 million to buy Unknown Worlds in 2021, seems like the natural party to file such a suit. After all, the founders had already sued Krafton through Fortis Advisors, accusing Krafton of delaying Subnautica 2’s Early Access release to avoid triggering a $250 million bonus payout tied to revenue milestones.
The Unknown Worlds’ lawsuit draws a sharper line: this isn’t just about money. It’s about what the co-founders did on their way out the door.
Downloading Data and Drawing Lines
The company alleges that the ex-founders downloaded massive amounts of files, including not only Subnautica 2 but even material from Moonbreaker, a past project. The download was so large it reportedly set off security alerts.
This wasn’t just an end-of-job archive. Unknown Worlds claims the ex-founders then threatened to release Subnautica 2 independently if Krafton didn’t pay up. When confronted, they allegedly offered to delete the files, an offer that itself suggests the gravity of what they held.
That’s the legal problem. NDAs and employment contracts don’t just forbid sharing confidential data, they also dictate how it must be returned or destroyed when employment ends. Downloading files without authorization crosses a line. Threatening to delete them crosses another. Even if Krafton has backup copies, courts focus on control. Companies need to verify where sensitive data lives. Without that control, the threat alone is damaging.
It’s not just a breach of contract. It veers toward violations of the Computer Fraud and Abuse Act, a law designed for precisely this kind of unauthorized access.
A History of Short-Term Thinking
The lawsuit paints a picture of leadership that had drifted. Krafton argues that Cleveland and McGuire disengaged from day-to-day operations, leaving Gill to handle the weight of development. Fans already noticed cracks: Cleveland publicly vented his frustration with Subnautica development, saying he needed a break, before jumping into work on a film project.
The irony is brutal. If the studio could ship a quality game without the co-founders’ focus, what was their role? They were fighting for bonus money, yet undermining the very conditions needed to secure it. Their behavior, from internal conflict to questionable data grabs, reflects a pattern. Short-term moves with long-term consequences.
Even the timing of their lawsuit against Krafton suggests this. By claiming Krafton purposely delayed Subnautica 2 to dodge payouts, they essentially admitted how closely tied their financial interests were to deadlines. Unknown Worlds’ response reframes that story: the delays were to protect quality, while the founders were willing to cut corners for the money.
Desperation in the Details
Desperation is what stands out here. Why download Moonbreaker files? The game was already a commercial disappointment. There’s no credible reason to have that data in personal possession, except leverage.
Threatening to release Subnautica 2 independently is even more desperate. The co-founders no longer own the rights. They sold those rights for half a billion dollars. Their window of creative control closed with that sale. The lawsuit suggests they couldn’t accept the finality of that deal. That the company they once built now operated without them.
They allegedly took matters into their own hands. In doing so, they may have given Krafton exactly the grounds it needed to terminate them for cause. Companies can’t always fire founders during an “earnout” period, but if misconduct is proven, exceptions apply. Unknown Worlds’ case rests on proving that line was crossed.
The Bigger Question
Here’s the central tension: were Cleveland, McGuire, and Gill acting strategically, gathering evidence and protecting their legal fight with Krafton? Or… were they simply acting out of panic, clinging to the possibility of payouts slipping through their fingers?
The evidence presented so far makes their actions look less like strategy and more like flailing. From a legal standpoint, desperation is no defense. If they indeed downloaded proprietary files after knowing termination was coming, that’s misconduct, plain and simple.
The Unknown Worlds lawsuit highlights a cautionary tale: when founders sell their studio, they also sell their control. Their only path to financial reward is through the agreements they signed. Trying to claw back leverage through questionable actions risks more than money. It risks legacy.
Whether the court sides with Unknown Worlds or the ex-founders, one thing is certain: this case will shape how the industry views founder transitions after acquisitions. Are founders trusted visionaries who need protection from corporate overlords? Or are they employees bound to the same rules as everyone else, once their company is sold?
Unknown Worlds v. Cleveland, McGuire, and Gill may answer that question. Until then, the story stands as a stark reminder: desperation and strategy are often separated by the thinnest of lines. Once crossed, there’s no going back.
