ChatGPT advised exec on how to fire Subnautica founders to avoid payout, court ruling says
The law is the law, no matter who tells you to break it
One of your studios is about to make a game that you think will be a huge hit, and you don't want to pay the contractually required bonuses. What to do? One Korean CEO turned to ChatGPT to cook up a plan to get his company out of paying up to $250 million. It went about as well as you'd expect.
By that, we mean the inevitable lawsuit we're reporting on today did not go the way that company, Krafton, would have preferred.
You may know Krafton as the Korean publisher that owns Unknown Worlds, the development house behind Subnautica. If so, you're probably also familiar with the kerfuffle around the development and release of Subnautica II.
Early access was supposed to begin in 2025, but Krafton delayed it, fired the company's founders, and seized control of Unknown Worlds in a bid to get out of paying the development house as much as $250 million if high earnings forecasts for the game turned out to be correct.
All of this was done at ChatGPT's advice.
According to a Delaware Chancery Court decision [PDF] this week, pretty much everything that Krafton CEO Changhan Kim did at ChatGPT's urging in his bid to avoid that payout turned out to be a gross breach of contract.
Per the decision, ChatGPT told Kim that the earnout would be difficult to cancel, but Kim kept pushing the bot, asking it what steps to take anyway.
At ChatGPT's recommendation, Kim formed a task force with a mandate to either negotiate changes to the earnout or completely take over Unknown Worlds. ChatGPT advised that, were negotiations to fail (which they did), Krafton should follow a specific sequence of events to ensure its success in the scheme, including preemptively controlling the public narrative by claiming that Subnautica II wasn't ready, and blaming the studio's founders.
ChatGPT also advised seizing control of distribution platforms like Steam to prevent Unknown Worlds from launching the game, and eventually firing the company's founding trio, with a made-up reason that they intended to release Subnautica II before it was ready, potentially damaging the franchise and harming earnings.
Krafton followed the plan to a T. The Unknown Worlds founders sued for breach of contract.
During trial, Krafton attempted to reframe the case, saying that the Unknown Worlds founders downloaded a bunch of data prior to being fired. They also argued that the founders asked to change roles to take on fewer day-to-day responsibilities, which was grounds to terminate their contract for violations of a business-as-usual clause. The judge laughed these arguments out of court.
In short, "none of Krafton's proffered justifications have merit," Judge Lori Will said in her decision.
The judge ordered Unknown Worlds founder and CEO Ted Gill reinstated and given full operational control back so as to "stabilize the studio," but declined to reinstate the other two founders, Charlie Cleveland and Max McGuire, as they had already stepped down from day-to-day operations at the studio.
"Krafton must also immediately restore to Gill all access necessary to effectuate that authority, including over the Steam publishing platform," the judge ordered.
For gamers who don't really care about the legal back and forth but just want to play the game, good news: IGN says early access will finally begin in May.
There's going to be a round two of the trial in which the judge decides if Krafton owes Unknown Worlds any money.
Krafton told The Register that it's been working hard on Subnautica II the entire time and looks forward to getting it released. The company also shared its reaction to the verdict.
"While we respectfully disagree with the ruling, we are evaluating our options as we determine our path forward," a Krafton spokesperson told us. "This ruling does not resolve the former executives’ claim for damages or an earnout related to Subnautica 2, with further litigation still pending. In the meantime, KRAFTON's immediate focus remains unchanged: delivering the best possible game to Subnautica’s fans." ®
Updated on March 19 to include comment from Krafton.