Valve boss Gabe Newell has confirmed that the team is working on the next iteration of its Source Engine leading to rampant speculation of several games that could be in development for it.
A group of visiting 4Chan members asked Newell if the team was working on a new engine to which he replied, “We’ve been working on new engine stuff for a while, we’ve just been waiting for a game to roll it out with.” When asked if this meant an entirely new engine and not just an extension of the existing one, he simply offered a “yeah.”
Of course with news like this hitting the Internet everyone has gone crazy with various game name dropping such as Half-Life 3, Left 4 Dead 3, and Portal 3. I’m fairly sure that at least one of those is actually in development at Valve, but the other two are unlikely to be anything more than design ideas for now.
Earlier this year several references to a next-gen Valve engine were discovered in script files in the recently released Source Filmmaker. You can check out a video of the visit below, the question is asked around the 6:10 mark.