Krafton says actions taken with Subnautica 2 show internal milestone process being “rigorously managed”
In an earnings call, investors questioned whether Krafton’s ‘myriad of investments’ are being well-managed.
It sounds like PUBG and Subnautica publisher Krafton wants investors to see the Subnautica 2 legal brawl as a net positive for the studio.
During a Q&A in the financial presentation for the second quarter of 2025, investors questioned the state of Krafton's publishing organization and its "myriad of investments." Using Subnautica 2 as an example, the company maintains its internal processes are appropriate for handling multiple games, initiatives, and individual milestones.
Krafton chief financial officer Dongkeun Bae acknowledged that "talk about legal proceedings" for Subnautica 2, as well as its delay, could lead people on the outside to think the company's internal milestone process is being mismanaged. But he'd prefer if investors on the call viewed Krafton's handling of the game in a positive light. According to the CFO, the actions that Krafton has taken on the game (which included dismissing the development leads) "actually represent that things are effectively being managed inside Krafton when it comes to the milestone management."
The reasoning behind this, as Bae explained, is that the Subnautica franchise has a large existing player base, and the company is confident that a "certain level of sales" would be guaranteed. Yet, Krafton is seeking to fulfill "the highest level of satisfaction that the gamers have," and thus decided on the delay.
"Because we've managed the whole milestone process very rigorously within the company, we were able to make the decision we made regarding Subnautica 2, because we felt that the game was not up to par, not up to the level that we had wished it to be. So I think that case goes to show that our milestone process is being rigorously managed," he said.
Amidst Subnautica 2 drama, Krafton continues its acquisitions
As Bae mentioned in passing, the delay of Subnautica 2 (from 2025 to early 2026, according to the financial presentation) is far from the biggest news surrounding developer Unknown Worlds' sequel. July kicked off with key leadership departing the studio. A week later, reports alleged that the news of the delay would impact a potential $250 million bonus for the team tied to revenue targets. The next day, Unknown Worlds founders Charlie Cleveland and Max Macguire, alongside former CEO Ted Gill, filed a lawsuit against Krafton.
A few days later, a redacted public version of the lawsuit became publicly available. In it, the three former leaders explained at length how the promise of Subnautica 2's "immediate and enormous success," taking the 2.5 million wishlists on Steam as prime reference, would "likely trigger the $250 million earnout to the studio's former owners and employees." This predicament, as the devs claimed, made Krafton "go nuclear" in a bid to delay that success.
Krafton's Changhan Kim told Unknown World leaders that an early access launch would be "disastrous financially and hugely embarrassing" for the publisher. Krafton leadership sent a statement to that tune along to Game Developer, and Bae reinforced this on the call, saying that releasing Subnautica 2 prematurely with insufficient content would have disappointed the players and damaged the reputations of both the Sunbautica and Unknown Worlds brands.
"While we are disappointed that Charlie, Max, and Ted have filed a lawsuit seeking a huge payout, we look forward to defending ourselves in court. In the meantime, Krafton remains focused on what matters: delivering the best possible game as quickly as possible to Subnautica’s fans," the statement reads.
Despite being in the middle of a legal battle, Krafton went ahead with its latest acquisition on July 25. The publisher now owns indie studio Eleventh Hour Games for an initial consideration of $96 million, which is known for the ARPG Last Epoch.
In regards to the financial results of the last quarter, Krafton reported a revenue of ₩1.54 trillion (around $1.1 billion), an increase of over 11 percent on the same period in 2024, while profits totaled ₩703 billion (around $505 million), signifying a 9.5 percent increase.
PUBG: Battlegrounds and Inzoi are at the forefront of these figures, the latter being the "fastest-selling Korean premium title to surpass 1 million units," according to Krafton. Now, the publisher intends to grow Inzoi into a global franchise, while it's also placing faith on PUBG's user generated content project launching on August.
The publisher currently has 13 new game projects in the works, and plans to ramp up efforts to "discover and grow new franchise IPs," expanding its internal studios and making even more investments across different genres and regions.