South Korean company following ChatGPT management advice forced to backtrack by court — Krafton improperly ousted Subnautica developer bosses to dodge $250m bonus payout

March 18, 2026 - 03:08

A South Korean court has ruled against gaming giant Krafton in a contentious management dispute, finding the company improperly ousted the leadership of its U.S.-based studio, Unknown Worlds Entertainment. The developer, known for the hit title Subnautica, was at the center of a corporate maneuver that the court determined was primarily designed to avoid paying substantial employee bonuses.

The legal challenge stemmed from Krafton's sudden dismissal of the studio's chief executive and chief operating officer in 2022. According to the court's findings, this action was taken following internal advice that cited the potential success of Subnautica and the looming financial liability of approximately $250 million in employee stock ownership plan (ESOP) bonuses. By replacing the leadership, Krafton allegedly sought to reclassify the bonuses and sidestep the massive payout.

The Seoul Central District Court has now invalidated the dismissals, ordering the executives' reinstatement. In its decision, the court strongly criticized the parent company's actions, stating the primary motive was clearly to deprive the employees of their rightful compensation linked to the game's performance, rather than any legitimate management reason. Krafton has stated it disagrees with the ruling and is considering its legal options. The case highlights the complex tensions between global corporate strategy and the contractual rights of successful development teams.