Source 2 in Development
Files dug up in the recently released Source Filmmaker suggest that Valve are working a new engine, Source 2.

Discovered by ValveTime, the file can be found here. On line 1387, the following is said:
”Return an str with the current engine version. If key doesn’t doesn’t exist, assume ‘Source’, otherwise invalid — assume next-gen ‘Source 2’.”
This line of code does suggest that Source 2 will be the next-gen engine for Valve. This is probably the reason why we haven’t heard anything on Half-Life 3 or Half-Life 2: Episode 3. This little description of Source on the Valve website could also be a small hint about Source 2:
“Source is considered the most flexible, comprehensive, and powerful game development environment out there. And it’s about to get even better.”
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