Krafton has settled its legal dispute with former executives of its subsidiary Unknown Worlds Entertainment.
Krafton disclosed on the 1st that, under a settlement between the parties, the plaintiff withdrew a lawsuit filed by Fortis Advisors, the representative of former shareholders of Unknown Worlds, seeking contract performance and damages.
With this settlement, Krafton and former executives of Unknown Worlds, including former CEO Ted Gill and co-founders Charlie Cleveland and Max McGuire, agreed to end all ongoing legal disputes.
In 2021, Krafton acquired Unknown Worlds, known for the ocean adventure game "Subnautica," for $500 million (about 780 billion won).
The conflict between the two sides surfaced during development of the follow-up "Subnautica 2." When it acquired the studio, Krafton included an earn-out clause to pay up to $250 million (about 390 billion won) additionally, depending on Subnautica 2's performance.
Krafton later concluded that "Subnautica 2" fell short of expectations and postponed the early access launch, initially planned for last year, to this year. It also dismissed executives including former CEO Gill, Charlie Cleveland and Max McGuire, citing issues such as neglect of duty.
The former executives then filed a damages lawsuit against Krafton for $250 million (about 390 billion won), saying Krafton dismissed them to avoid paying the earn-out.
A Krafton official said, "Unknown Worlds and Krafton are focused on supporting Subnautica 2, its Early Access journey to the full 1.0 release and the global community that has made the franchise so special," adding, "Unknown Worlds will continue leading development, with Krafton providing support for the success of the game."