Krafton has settled a lawsuit it had been fighting with former management of its subsidiary Unknown Worlds over contract performance and damages claims.

Krafton said on Tuesday it had disclosed that the plaintiff had withdrawn a lawsuit filed by Fortis Advisors, a former shareholder representative of Unknown Worlds.

According to the disclosure, the withdrawal followed a settlement between the parties, and the amount of any judgment or decision was not separately stated. The withdrawal was submitted on June 30 U.S. time, and Krafton confirmed it on Tuesday. The case number is C.A. No. 2025-0805-LWW, and the court is the Delaware Court of Chancery. Krafton had previously disclosed on July 24, 2025 that the lawsuit had been filed.

The lawsuit was filed over a conditional earnout clause included in Krafton’s acquisition agreement for Unknown Worlds. An earnout is a condition under which an additional payment is made to the seller if certain performance targets are achieved after an acquisition. Unknown Worlds is a U.S. developer that holds the intellectual property rights to the ocean survival adventure game “Subnautica,” and Krafton acquired the company in 2021 for $500 million. The contract included a condition to pay an earnout of up to $250 million, depending on performance including that of “Subnautica 2.”

The dispute began when Krafton removed founding members of Unknown Worlds, including Charlie Cleveland (찰리 클리블랜드), Ted Gill (테드 길) and Max McGuire (맥스 맥과이어), from management in July last year and replaced the chief executive officer. The dismissed former managers argued Krafton changed management to avoid paying the earnout and filed a damages lawsuit seeking performance pay of up to $250 million. Krafton, for its part, has said the move was to manage game quality and the development schedule due to delays in developing “Subnautica 2.”

In the case, the Delaware Court of Chancery in March ordered Krafton to reinstate former head Ted Gill and restore management authority, and extended the deadline to pay performance compensation to Sept. 15. Monetary issues, including whether to pay the earnout and the amount of damages, remained for separate judgment.

Unknown Worlds then released “Subnautica 2” in early access in May. The game’s publisher listed on Steam and other platforms was originally Krafton, but was changed to Unknown Worlds after the U.S. court’s reinstatement ruling. “Subnautica 2” sold 2 million copies worldwide within 12 hours of release and topped 4 million copies within 5 days, succeeding in its initial sales performance.

Against that backdrop, the two sides wrapped up the lawsuit through a withdrawal by the plaintiff. The specific settlement terms were not disclosed.

A Krafton official said Krafton and Unknown Worlds are focusing on development and the official launch of “Subnautica 2,” and are making it their top priority to provide the best experience to Subnautica fans. The official said Unknown Worlds will continue to lead development and Krafton will continue to provide the support needed for the game’s success.