[STEAM] 'Korea — They Are the Joe Pesci of Countries' — Krafton Alleges Former Subnautica CEO 'Referenced Racist Views Toward Korea and Korean People' as Trial Comes to an End, Drafts in Former BioWare Boss as Expert Industry Witness

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The trial that may determine the future of hit video game franchise Subnautica has ended with a number of serious allegations made by Korean mega corp Krafton against the ousted former bosses of developer Unknown Worlds.

Unknown Worlds co-founders Charlie Cleveland, Max McGuire, and Ted Gill sued Krafton, claiming the company fired the trio to avoid paying an allegedly owed $250 million bonus, despite, the founders say, Subnautica 2 being ready for an early access launch this year. They now want to be reinstated at Unknown Worlds.

Krafton claims the co-founders had already downed tools long before they were fired, while also insisting Subnautica 2 was not ready for release this year. Krafton also alleges the executives stole information relating to Subnautica while still at the company in anticipation of subsequent legal action.

Former CEO of Unknown Worlds, Charlie Cleveland, appeared in a Delaware court on Wednesday, November 19 to answer questions from Krafton’s legal team as part of a cross examination.

During the trial, a document titled ‘Litigation Help’ was shown to the court. In it are notes written by Cleveland relating to advice given to him by Owen Mahoney, who was CEO and President of South Korean video game company Nexon, for a decade (2014–2024), as part of an alleged plan drawn up by the Unknown World co-founders to take on Krafton in court.

The notes, dated June 28, 2025, contain a number of phrases Krafton alleged were “racist views toward Korea and Korean people.” During cross examination, Cleveland admitted writing the notes, but insisted they were a transcription of advice issued by Mahoney only, and not words he himself said. IGN has asked Mahoney for comment.

"So these are not my words,” he said. “These are all transcriptions from what we were advised by — advised to do. Like these are words coming out of two other people's mouths not mine.”

And: "Again every single word as far as I know in this document is something that Owen said, not what I said."

And: "... I'm writing down what Owen told us. So it has nothing to do with my opinions at all."

Key excerpts from the ‘Litigation Help’ document, reviewed by IGN, include:

“Delaware? Oh, they’re f***ed. You don’t even need a Korean lawyer.”

“We just need a list of things from them. We’re playing the house’s money and we’re the home team. We don’t need to worry about these guys or our reputation. History will remember that Krafton was bad. Even the

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crowd hates them because of Dark & Darker.”

“Korea — they are the Joe Pesci of countries. Charming until they’re incredible ******. It goes to 11 quickly. No filter. It can be emotionally draining dealing with this, especially as male westerners. Males might be more problem-solvers and bring less emotion — they’re biological reasons for this.”

“It’s small and ******. Every year some big film star commits suicide because of sex, drugs or something, hounded by press.”

“Delaware will say this is a bunch of Sadistic Korean ********* (like Samsung — John Pleasance). They’ve cast as villains and it’s done.”

Krafton accused Cleveland of writing in the notes that Delaware courts could be disadvantageous to Krafton, “suggesting a lack of judicial fairness toward foreign companies.” Krafton also alleged that Cleveland “referenced racist views toward Korea and Korean people, speculating on biological reasons for Korean men to be ‘less emotional.’”

Krafton said Cleveland’s notes “devolve into name-calling and prejudicial views, suggesting biases that could prevent Krafton from receiving fair treatment in a Delaware court.”

Krafton also alleged that in the notes, Cleveland “outlines a plan to pursue $1 billion through litigation — a figure far exceeding the $250 million earnout initially agreed upon.”

“Don’t just go for the earn-out,” the notes read, “go for $1B in emotional distress and damage. This is the mindset we need to have. Nuclear.”

Again, during the trial Cleveland responded to the document to say: “These are all transcriptions from what we were advised by — advised to do. Like these are words coming out of two other people's mouths not mine.”

“Remarkably, the notes made public appear to be a collection of real time messages, focused on and prepping litigation even before his employment at UW was terminated,” Krafton said in a statement issued to IGN.

“In further exchanges that raise questions about Cleveland’s character, he repeated racist views against Koreans and repeatedly discussed trying to get as much money as he could from Krafton.

“Further, in sworn testimony on Wednesday, Cleveland reiterated that he was not interested in creating games for Unknown Worlds, considered himself semi-retired, wasn’t actually working hard on the Subnautica movie, looked to delete his own ChatGPT records and flirted with starting a new company. The testimony came from cross examination where he was often asked to respond to his prior statements.”

On this point, here’s the relevant exchange between Krafton’s attorney, John Del Monaco, and Unknown Worlds co-founder Charlie Cleveland, during cross-examination at the trial:

Q. On the right-hand side you wrote, "Quick reminder: check your company ChatGPT account to make sure there's nothing incriminating there." Right?

A. Yes.

Q. So in addition to indiscriminately downloading all of the company's files that you could get your hands on, you were also checking to see what incriminating information might be out there; right?

A. Like I said, I wanted to make sure we knew how they were going to attack us.

Q. You were getting ahead of the game is your testimony?

A. We wanted to look and see what was up there, yes.

Later in the day, Krafton called on Aaryn Flynn, current CEO of Inflexion Games, maker of Nightingale, and former General Manager at Mass Effect and Dragon Age developer BioWare, as an industry expert witness. Flynn testified that the actions of the former Unknown Worlds bosses were not in keeping with industry norms, and they did not meet the expectations the industry would expect of people in their roles.

With the trial now at an end, January 9, 2026 was set as a post-trial argument date. Following that, the delivery of the judgment is expected. All the while, the two parties may settle out of court.

“We are grateful to the court for its thorough commitment to understanding the facts, and we are confident we have demonstrated our commitment to delivering the best game possible to our fans,” Krafton said. “We made clear to the court that we were forced to make a change when the former leaders showed little interest in the development of Subnautica 2, which has always been our top priority.

“Now, this trial comes down to plaintiffs asking to be restored to jobs they were not doing, said they had no interest in doing, and had previously declined requests that they come back and do those jobs. We look forward to receiving a decision. We have made incredible progress in the past few months, and we are excited to share with all the Subnautica fans.”

Amid the high-profile legal spat, fan concern over the fate of Subnautica 2 remains, with many within the game’s community worried that it will not meet their expectations due to the legal drama surrounding it — no matter when it is released.

Wesley is Director, News at IGN. Find him on

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at @wyp100. You can reach Wesley at [email protected] or confidentially at *****@*****.tld.

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