Seoul: Krafton Inc. announced in a regulatory filing on Wednesday that it has reached a settlement with the lead developers of the Subnautica video game series, concluding their legal battle regarding earn out bonuses. Both parties agreed to withdraw all pending lawsuits as of Tuesday.

According to Yonhap News Agency, the conflict began after Krafton acquired Unknown Worlds Entertainment Inc. in October 2021 to expand its game portfolio beyond PUBG: Battlegrounds. The acquisition aimed to leverage Unknown Worlds' strong intellectual properties, notably the popular underwater survival game, Subnautica. However, the relationship soured last year when Krafton removed the co-founders and CEO Ted Gill, citing leadership issues and delays in the development of Subnautica 2. This led to a lawsuit by the former executives, alleging Krafton sought to avoid a US$250 million bonus payment by delaying the game's development.

In March, a U.S. court ruled in favor of Unknown Worlds, ordering Krafton to reinstate the executives. An official from Krafton stated that both companies are now focusing on the development and launch of Subnautica 2, emphasizing fan experience as a priority. Unknown Worlds will continue to lead the development while Krafton provides necessary support.

The early access launch of Subnautica 2 in May saw over 4 million copies sold, highlighting the game's strong market performance.