How Subnautica 2's $250M Payout Became a Landmark Earnout Victory

In a saga that became a cautionary tale for game studio acquisitions, publisher Krafton has finally agreed to pay the full $250 million earnout to the creators of Subnautica 2. The payment, confirmed by reports from The Korea Economic Daily and IGN , brings a dramatic end to a legal battle that saw a Delaware court reinstate a fired CEO, extend a contractual deadline, and effectively force the publisher's hand after the game’s blockbuster launch.

The Acquisition and the Earnout

When Krafton acquired Unknown Worlds Entertainment in 2021, the deal was structured as a $500 million upfront payment plus a potential $250 million earnout tied to the studio’s future performance . The earnout clause was exceptionally generous to the founders: for every dollar of revenue exceeding a $69.8 million annual threshold, the trio of Ted Gill, Charlie Cleveland, and Max McGuire would receive $3.12, up to the $250 million cap . At the time, both parties likely saw the targets as ambitious, but achievable.

The Alleged Sabotage

The situation soured by mid-2025. The founders, represented by Fortis Advisors LLC, alleged that Krafton was deliberately trying to avoid the nine-figure payout. Their lawsuit claimed the publisher fired CEO Ted Gill and other senior leaders without cause, seized operational control of Unknown Worlds, and unilaterally pushed the Subnautica 2 Early Access launch out of 2025 and into 2026 . The timing was crucial: the move would place the game’s release beyond the original earnout deadline, effectively killing any chance of the bonus being paid .

The Delaware Court's Sweeping Ruling

In Fortis Advisors LLC v. Krafton, Inc., Vice Chancellor Lori W. Will of the Delaware Court of Chancery ruled decisively in the sellers’ favor on March 16, 2026 . The court’s post-trial decision found that Krafton had breached the Equity Purchase Agreement by terminating key employees without valid “cause” and by usurping the operational control that had been specifically bargained for in the contract .

The remedies were designed to neutralize Krafton’s strategy and make the original deal whole:

• CEO Reinstatement: The court ordered Ted Gill reinstated as CEO with full authority over the game’s release schedule .
• Deadline Extension: The earnout period was equitably extended by 258 days—the exact duration of Gill’s ouster—pushing the final deadline from early 2026 to September 15, 2026 .
• Phase Two Reserved: The court chose not to rule on monetary damages immediately, reserving that question for a second phase of litigation .

A Launch That Shattered Records—and Krafton’s Plans

The court’s ruling set the stage, but Subnautica 2 itself sealed the outcome. The game launched into Early Access on May 14, 2026, and became an instant phenomenon. It sold over 2 million copies in its first 12 hours and crossed 4 million units in under a week, generating an estimated $100 million in gross revenue over those first five days . The performance made hitting the earnout’s revenue milestones a near certainty well before the newly extended deadline.

The $250 Million Reckoning

The math behind the earnout, combined with the game’s explosive sales, meant Krafton could no longer avoid the obligation. Reports from South Korean business press and industry outlets now confirm the publisher has acknowledged the revenue targets were met and the full $250 million payout will be made .

The payout is a staggering financial event for Krafton. It reportedly represents more than one-third of the company’s total 2025 annual profit of $736 million, a massive cost for a maneuver that ultimately failed . The episode has become a defining example of how aggressively enforced earnout provisions can backfire when a creative team’s product succeeds beyond all attempts to suppress it.