If you weren't aware, a legal battle has been unfolding between Unknown Worlds, the developer of Subnautica 2, and its parent company and former publisher, Krafton, in what appears to have been a bit from Krafton to avoid paying Unknown Worlds a $250 million performance bonus relating to the launch ...
According to The Korean Economic Daily, citing insider sources, Krafton has now been forced to pay out that bonus, which equates to $3.12 for every $1 every month that Unknown Worlds surpasses $69.8 million in revenue, with an upper limit of $250 million. This amounts to around 35% of Krafton’s operating profit in 2025, which may explain why Krafton fought tooth and nail to avoid paying the sum.
Subnautica devs have maxed out their bonuses already 😂
Yeah thats the part I understood, but on what conditions? If they earn 69m$ for 6 months in a row, the bonus is 0$ but if they earn 70m$ one month and 0$ for 5 more months the bonus is 210m$? That kind of doesnt make any sense.
When Krafton bought Unknown worlds there was an agreement that if Subnautica 2 hits certain revenue goals in early access Krafton pays out $250 million. So when Subnautica 2 sales hit 69.8 million Krafton had to pay out $250 million. So basically Krafton has now had to pay out 3 dollars for every dollar made from the Subnautica sales.
Looks like Krafton negotiated insanely bad bonus conditions and terms for themselves here. Are they adrenaline junkies or am I bad at math because it looks like they have to pay much larger bonuses than they made revenue so far.
That entire situation was ridiculous. The major points:
Yes, that contract was stupidly favorable to Unknown Worlds. It was negotiated by none other than Chang-ham Kim, CEO of Krafton.
Kim later realized that and wanted to back out of the contract because it would’ve made him look like a pushover. He employed the help of ChatGPT, which told him that it was a stupid fucking idea.
He went ahead with the plan anyway. He fired Unknown Worlds’ three co-founders for made-up reasons and appointed Steve Papoutsis as the CEO
He tried to sabotage the game’s development by disrupting communication between Unknown Worlds and other departments, to push the early access launch beyond the window where the 250M could be earned.
Obviously it went to court. Krafton tried to change the story about the reason the co-founders were fired based on information that they discovered afterwards (they kept backups of documents, which Krafton argued was industrial espionage), but the judge was having none of that chicanery.
During discovery, the ChatGPT logs and some conversations were revealed that personally implicated Kim.
The court ruled in Unknown Worlds’ favour. The judge ordered Ted Gill to be reinstated as CEO (the other two co-founders chose not to return) and the bonus window to be extended by several months to account for the time that they didn’t have conrol of the company.
As a last fuck-you, Papoutsis prematurely announced Subnautica 2’s early access launch. Gill had no idea about the state of development.
Subnautica 2 then went on to be a massive success, Krafton has joined EA and Activision in the doghouse, and Chang-ham Kim is now known to be both a pushover and a fucking idiot.
Good summary. What’s wild to me is reading through this and pondering the frequency of these events. “Someone made an arrogant/stupid business decision” multiple times a day every day. “Someone tried to weasel out and was told that was stupid” also every day. “Went ahead with the plan anyway” - very frequent. “Tried to burn it all down” - all too often. Then we get to the turn where the wronged actually got a fair day in court- far, far less often. Then the villain of our story with $250M on the line somehow didn’t lawyer up enough to get the best justice money can buy - almost seems like fiction at this point and beyond.
I mean, you could see it as an investment? You know, by motivating their workers to create a very good product that then sells very well later when they are out of early access? Like a theoretical normal company should do?
They probably need to sell over 14 million copies at full price to break even with that bonus. The math is very bad for them. That’s not impossible, but it would make it one of the best selling games of all time (top 50)
Thanks for checking the math, that is indeed an ambitious goal to reach.
Subnautica 1 and Below Zero together sold over 18 million copies, so reaching over 14 million with only one installment is doable with the bonus of being well known now, but still very ambitious.
And just to admit: yeah I also think the CEO did an overly stupid thing with that amount of money as bonus. But he also uses ChatGPT as legal advisor, so him being stupid is something we already knew.
From the articles I read: the three main developers didn’t deny that fact but said, they will give parts of their money to the others. And apparently they did do that for the initial money they got for selling the company to Krafton in the first place, so at least once they followed their word.
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Im a little lost here. Can someone explain this sentence please?
Krafton is paying out $3 for every $1 earned. They made a shit deal.
Yeah thats the part I understood, but on what conditions? If they earn 69m$ for 6 months in a row, the bonus is 0$ but if they earn 70m$ one month and 0$ for 5 more months the bonus is 210m$? That kind of doesnt make any sense.
When Krafton bought Unknown worlds there was an agreement that if Subnautica 2 hits certain revenue goals in early access Krafton pays out $250 million. So when Subnautica 2 sales hit 69.8 million Krafton had to pay out $250 million. So basically Krafton has now had to pay out 3 dollars for every dollar made from the Subnautica sales.
Looks like Krafton negotiated insanely bad bonus conditions and terms for themselves here. Are they adrenaline junkies or am I bad at math because it looks like they have to pay much larger bonuses than they made revenue so far.
That entire situation was ridiculous. The major points:
Good summary. What’s wild to me is reading through this and pondering the frequency of these events. “Someone made an arrogant/stupid business decision” multiple times a day every day. “Someone tried to weasel out and was told that was stupid” also every day. “Went ahead with the plan anyway” - very frequent. “Tried to burn it all down” - all too often. Then we get to the turn where the wronged actually got a fair day in court- far, far less often. Then the villain of our story with $250M on the line somehow didn’t lawyer up enough to get the best justice money can buy - almost seems like fiction at this point and beyond.
Wild ride. That Kim bloke has been underwater and panicking for a while now
So… did he use ChatGPT to write the contract in the first place? If so, that would fucking hilarious.
The acquisition was finalised in late 2021. No, Kim was stupid entirely by his own power.
I mean, you could see it as an investment? You know, by motivating their workers to create a very good product that then sells very well later when they are out of early access? Like a theoretical normal company should do?
They probably need to sell over 14 million copies at full price to break even with that bonus. The math is very bad for them. That’s not impossible, but it would make it one of the best selling games of all time (top 50)
Thanks for checking the math, that is indeed an ambitious goal to reach.
Subnautica 1 and Below Zero together sold over 18 million copies, so reaching over 14 million with only one installment is doable with the bonus of being well known now, but still very ambitious.
And just to admit: yeah I also think the CEO did an overly stupid thing with that amount of money as bonus. But he also uses ChatGPT as legal advisor, so him being stupid is something we already knew.
Oh no, the Krafton CEO cannot afford to purchase a new yacht this year. Poor guy. Should we start a GoFundMe for him?
To be fair, 90% of that 250 is going to three guys so someone was getting a yatch either way.
Was that confirmed by anyone else? Because as far as I know Krafton made that claim and I wouldn’t trust a single word Krafton says.
From the articles I read: the three main developers didn’t deny that fact but said, they will give parts of their money to the others. And apparently they did do that for the initial money they got for selling the company to Krafton in the first place, so at least once they followed their word.
I’m worried he’ll recoup the shortfall by screwing over Krafton’s other owned studios, Embracer-style.