Quick answer: A known issue is a bug that the developer already knows about and has acknowledged, as opposed to one that is newly discovered. The term is most often used for issues published in a public 'known issues' list, which tells players the problem is recognized, is being worked on, and may have a workaround in the meantime.
"Known issue" is a small phrase that does a lot of work in game communication. When a player hits a bug and sees it listed as a known issue, the whole experience changes: instead of feeling like they have discovered an ignored problem, they feel informed and reassured that the developer is aware and on it. Understanding the concept, and the practice of maintaining known-issues lists, is central to managing player trust around the bugs that inevitably ship.
What 'Known Issue' Means
At its core, a known issue is simply a bug the developer already knows about. Every bug starts as unknown, undiscovered, until it is reported or found; once you are aware of it, it is a known issue. The distinction matters mostly for communication: labeling something a known issue is a statement to players that you recognize the problem, distinguishing it from bugs you have not yet heard about.
Known issues are typically ones you have acknowledged but not yet fixed, the bugs in the gap between discovery and resolution. Some are shipped deliberately (too minor or risky to hold a release for), others are discovered after release. Either way, 'known' signals awareness, and that awareness is what you communicate to players.
Why Known-Issues Lists Matter
A published known-issues list is one of the highest-value pieces of player communication a studio can maintain. It does several things at once: it tells players you are aware of problems (reassurance), it deflects duplicate reports (players who see their bug listed do not file it again), it can provide workarounds (keeping players playing despite the bug), and it signals competence and transparency (a developer on top of their game).
The opposite, players hitting bugs with no indication you know about them, breeds frustration, duplicate reports, and the impression that you are not paying attention. A known-issues list converts the bugs you ship from nasty surprises into managed, acknowledged, communicated problems, which is far better for player trust even though the bugs themselves are the same.
Maintaining Known Issues Honestly
A known-issues list only works if it is honest and current: it must include the real problems (even embarrassing ones, omitting the bug everyone hits makes players think you are hiding it) and stay updated as statuses change. A stale list that still shows fixed bugs as open, or misses the current major issue, destroys its own credibility.
The sustainable way to maintain one is to drive it from the issues you already track rather than a separate document that drifts out of sync. Bugnet's public tracker lets you mark issues public with their live status, so your known-issues list mirrors your real tracked bugs automatically, players see acknowledged issues and their status without you maintaining a duplicate list, and updating a status updates what players see. The known-issues concept becomes a living, accurate reflection of what you know and are working on.
A known issue is a bug you've acknowledged. Telling players 'we know' turns a discovered problem from a frustration into reassurance.