In late 2019, publisher Take-Two Interactive delayed the release of Kerbal Space Program 2 until sometime during fiscal year 2021 (between April 1, 2020 and March 31, 2021). Then came the surprise announcement in February 2020 that the game's development had moved from Star Theory Games to a new studio established by the company's publishing label Private Division, led by "key members" of Star Theory's "Kerbal 2" team.

The change was made to the company's new studio, established by Private Division, the company's publishing label, and led by "key members" of Star Theory's Kerbal 2 team.

The reason for the change was not disclosed, but a new report from Bloomberg may shed some light on the matter. According to the report, Star Theory founders Bob Berry and Jonathan Mavor had been negotiating with Take-Two about selling the studio, but were unable to come to terms. Then, on December 6, Take-Two abruptly terminated its contract with Star Theory and sent a message to employees via LinkedIn, encouraging them to apply for a new studio to be established under 2K's publishing label, Private Division.

More than one-third of Star Theory's employees, including studio head Jeremy Abrams, creative director Nate Simpson, and lead producer Nate Robinson, moved to Take Two. Kerbal 2 was then Star Theory's only contract, and closed on March 4 after failing to secure funding.

Industry analyst Doug Klutz told Bloomberg that the move could have "reputational risk" for Take-Two. However, Private Division sees the situation differently, stating in a statement that the change was made to make the game better.

"Private Division has opened our own studio, Intercept Games, to develop Kerbal Space Program 2, our beloved KSP franchise, in-house. In doing so, we have a deeply passionate and talented team focused on quality, and we are thrilled with the progress they are making on the game," said a Private Division representative.

"The launch of KSP2 next year marks another proud step in the franchise's history, and we are confident that KSP fans will greatly enjoy how Intercept Games is moving forward with this series.

The Kerbal 2 team said on Twitter in May that due to the ongoing COVID-19 pandemic, Kerbal Space Program 2 has been further delayed, to fall 2021.