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Nicholas Lovell
Home   >   Analysis and Opinion   >   When the Streisand Effect comes for Krafton – a cautionary tale

When the Streisand Effect comes for Krafton – a cautionary tale

By on March 17, 2026

You may have heard that the CEO of Krafton tried to weasel out of a contract to pay the makers of Subnautica a $250 million earn out. Largely by firing the founders and claiming that they were dismissed for cause.

The founders took Krafton to court, and Krafton just lost the first phase.

The discovery document (shared by Rami Ismail on LinkedIn) is fascinating. Some highlights:

  • Krafton bought Unknown Worlds Entertainment in 2021 for $500 million upfront plus up to $250 million in contingent earnout payments.
  • In mid 2025, it looked as if Subnautica 2 was on track for a successful launch in August of that year, triggering the earnout payment. According to the discovery document, this “immediately captured the attention of CEO Kim. Kim, who had personally led the acquisition of Unknown Worlds, felt that Krafton had overpaid. He feared that making an earnout payment would earn him a reputation as a ‘pushover’.”
  • Kim was warned by his own team that it would be hard to cancel the earnout. So he turned to ChatGPT, which also responded that the lawsuit would be “difficult to cancel”.
  • Kim ignored this advice, and followed a roadmap set out by ChatGPT.

The judge has concluded that Krafton broke the contract by firing the employees. She reinstated CEO Edward Gill, extended the timeline of the earnout by the duration of Gill’s “ouster” and stated “Krafton is enjoined from… impeding Gill’s authority over the early access launch of Subnautica 2.”

The second phase of the lawsuit “whether Krafton’s actions wrongfully impaired the earnout, and whether any resulting money damages are owed, are reserved for the second phase of this litigation.”

The whole judgement is worth a read, if only for insight into how large companies can work. To this uninformed outsider, it looks as if Krafton paid a high (but not insane) price for a business in 2021, regretted agreeing to the earnout when it looked as if it might be earned (which is, after all, the point of an earnout) and then tried strange (and, it turns out, uncontractual) mechanisms to avoid paying it.

All of which is messy. And doesn’t make Krafton come out of this whole experience very well.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com