KRAFTON's U.S. subsidiary Unknown Worlds has filed a countersuit against a 350 billion won damage claim lawsuit initiated by former executives.
On the 14th, KRAFTON released its semi-annual report, stating, "On the 11th, its subsidiary Unknown Worlds filed a lawsuit in Delaware Chancery Court against former executives for breach of stock purchase agreement, violation of duties of care and loyalty as directors and officers, and breach of employment contracts."
Earlier, Ted Gill, the former Chief Executive Officer (CEO) of Unknown Worlds, and co-founders Charlie Cleveland and Max McGuire filed a $250 million (approximately 344.75 billion won) damage claim lawsuit against KRAFTON in a Delaware court at the end of last month. In response, KRAFTON has initiated a countersuit through its subsidiary Unknown Worlds. The conflict between the two sides is escalating into a legal dispute, taking on the appearance of a war of attrition.
Unknown Worlds is a U.S.-based game developer that KRAFTON acquired for $500 million (approximately 580 billion won) in 2021, known for developing the popular marine adventure game "Subnautica," which has sold over 6 million copies worldwide. The studio is currently working on its next title, "Subnautica 2."
At the time of the acquisition, KRAFTON stated that if Unknown Worlds developed and released the sequel "Subnautica 2" within this year and achieved certain revenue targets, it would grant about $250 million (approximately 340 billion won) in performance bonuses to executives and employees. However, KRAFTON recently postponed the early access launch of "Subnautica 2," originally scheduled for the second half of this year, to next year, citing low quality, and unexpectedly fired executives. The former executives claimed that "KRAFTON fired us to evade the performance bonus payment."
In contrast, KRAFTON rebutted that the delay in releasing "Subnautica 2" was due to negligence on the part of Unknown Worlds' management. KRAFTON issued a statement saying, "We expected the three former executives of Unknown Worlds to actively participate in the development of 'Subnautica 2' and to demonstrate leadership, allocating about 90% of the performance bonuses, but they focused on individual film production projects, neglecting the development work."
It promised to replace the management to ensure the game development continues with quality and to provide fair compensation to the remaining staff of Unknown Worlds.
In its semi-annual report, KRAFTON revealed that it originally anticipated revenues of 85 billion won in 2023, 83.4 billion won in 2024, and 66.3 billion won in the first half of 2025 from Unknown Worlds.
However, it stated that performance fell short of expectations due to poor results of new titles and delays in releases. Actual revenues were reported as 37.1 billion won in 2023, 39.1 billion won in 2024, and 17.8 billion won in the first half of 2025, which did not reach even half of the projections. It cited the failure of "Moonbreaker" and the postponement of "Subnautica 2" as specific reasons.
Additionally, after the acquisition of Unknown Worlds, stock options were granted to three executives, and it recorded an operating profit of only 7.1 billion won, far below expectations of 52.8 billion won, with the previous year and the first half of this year barely breaking even at 2.7 billion won and 300 million won, respectively.