Why Half-Life 2: Episode 3 Never Happened

One of gaming's most anticipated titles, Half-Life 2: Episode 3, never arrived. Why? We take a look at the mystery behind Half-Life 3...

1998 was a much simpler time in the world of gaming, especially that of the FPS. Back then, gamers were more than happy with wave after wave of foes that were obliged to throw themselves in front of their sights, and the idea of a worthwhile narrative wasn’t considered all that essential. Games like Unreal, Quake II, and Turok were among the most popular FPS titles around, and action was very much the focus. Until the arrival of a landmark title from Sierra, a title that would change the face of the FPS forever.

November 19 saw the release of Half-Life, the first game from new developer, Valve. Half-Life was, on the face of it, a simple FPS, but once players actually got hold of it, they found a game unlike any they’d played before.

For one, it had an actual story, one that wasn’t consigned to the manual or a couple of load screens. Instead, the story of Half-Life actually unfolded in front of the player, with character interactions, set pieces, and dramatic changes in tone. Let’s not forget that long train ride into work, either. Although slow, this was packed with so much flavor and lore-content, by the time you stepped off the train to be greeted by Barney the security guard, you had the perfect idea of what type of research facility Black Mesa was. This was no ordinary job, to say the least.

Half-Life had its shortcomings, such as the fairly poor Xen levels, yet  it quickly became one of the most critically acclaimed games ever made. It’s one of the most influential games ever developed. Oh, and it sold well, too. Very well.

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The following years would see several expansions, developed mainly by Gearbox Studios, with Opposing Forces in 1999, then Blue Shift, and Decay in 2001. Half-Life 2 then followed in 2004, to even greater acclaim. That said, it’s admittedly sudden ending left fans wanting. But then Valve embarked on a series of episodic adventures. Three were expected, to this date two have arrived. We’ll pick the story up in 2006… 


Half-Life 2: Episode One arrived, and expanded on the story, delving deeper into supporting characters Alyx and Eli Vance, as well as the sinister G-Man, and Combine, the alien race that had taken over the Earth. Gameplay was also expanded, with even more of the top notch action Valve had delivered before, and the genius addition of the Gravity Gun, and all sorts of new physics features that made the most of it. 

In an interview with Eurogamer in June 2006, Valve’s Gabe Newell not only talked about Episode Two and Three, but also labeled Episodes One to Three as Half-Life 3.

“Probably a better name for it would have been Half Life 3: Episode One, but these three are what we’re doing as our way of taking the next step forward, but Half-Life 2 was the name we used,” he said, followed by, “Half-Life 3 [a.k.a. Episodes One to Three] is about the relationship with the G-Man and what happens when he loses control of you, when you’re not available to him as a tool and how he responds to that, and what are the consequences of that.”

Earlier in the interview, Gabe also revealed that there was a lot more content planned aside from the three episodes.

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“There are three that are in this arc. There are three that are worked out, and those are the ones that we’ve been talking about so far.”

This would suggest that after the third episode, there could be another three, followed by additional Half-Life content. Quite what this would entail isn’t clear, but as we still haven’t had Episode Three, we may never know.


In early 2007 Valve marketing director, Doug Lombardi confirmed to Eurogamerthat Episode Three was already in development, which seemed like a solid promise of the game’s arrival later in the year. However, the project lead, David Speyrer, while talking to Rock Paper Shotgun commented on the lack of an Episode Threetrailer at the end of Episode Two.

“We’re going to try and do something pretty ambitious for that project. We don’t want to over commit. If you look at the Episode Two trailer that we shipped with Episode One, there’s some pretty radical difference between what you see there and see in finished game. That’s really an artefact of making a trailer for a product that’s still in heavy production. You just don’t know where you’re going to end up.”

This seemed fairly innocuous at first, simply a team not wanting to promise the world and not deliver, but with the benefit of hindsight, you have to wonder, was the project already in trouble, and facing possible cancellation for some reason? Maybe not, but it’s a possible hint of what was to come, or not, as the case may be.

Read More: What Half-Life 3 Would Have Been About

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October 10 saw the release of Half-Life 2: Episode Two. This was another high-quality addition to the Half-Life 2experience, and delivered even better and varied action, and expanded on the plot. In contrast to the mainly urban warfare of the previous game, Episode Two focuses on more open and rural areas, telling the story of Gordon and Alyx’s journey to White Forest and the struggle to stop the Combine’s new super portal.

Finally, we had the ending, and one of the most infamous cliffhangers in gaming, simply because we’ve never seen what happens next. We were all set to play the final episode at Christmas of the same year, but would we?

No, we wouldn’t.Christmas of 2007 came and went, with Episode Three nowhere to be seen. There was no announcement or a delay, the game simply didn’t show up.



The mystery of Episode Three‘s absence was at the forefront of fan’s minds. This was the biggest FPS ever, and one of the biggest games of all time, where on Earth was the next installment? Gabe Newell had talked about it in recent interviews, including on with GTTV, in which he boasted about the new features in the game. Fans dug into all sorts of areas to try and find out more, given the surprising silence from Valve.

Within the Source Engine SDK (Software Development Kit), a user found references to ‘Episode3,’ but these were debunked by a Valve staff member as being simply leftover assets. Some thought this was a blatant attempt to divert attention, however.

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Valve threw fuel on the fire by announcing that Episode Three would miss 2008’s E3. This was followed a month later by some of the first concept art, which placated a few, but could also be seen as a simple stalling tactic. Doug Lombari promised more information on the game by the end of the year, but guess what? It never arrived, and he blamed other Valve projects, including Left 4 Dead and Team Fortress 2 for the lack of any updates on Episode Three.


Not a great deal happened in 2009 with regard to Episode Three. Valve wasn’t idle, though, and to the surprise, and some overwhelming venom from fans, instead of delivering Episode Three, the announcement of Left 4 Dead 2 was met with outrage, with some fans threatening to boycott Valve, and urging others not to buy the game. Petitions were penned, and there was much anger thrown around.

Left 4 Dead 2 went ahead anyway, and it was very good.

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Gabe Newell gave a few interviews in 2010, talking about his intent to make Half-Life more terrifying, but as for a release date for Episode Three, there was nothing. Popular magazine, Game Informer rumored that the game wouldn’t arrive in 2010, which was obviously correct, and with it still MIA, more Episode Three assets were found, this time in the Alien Swarm SDK.

A petition called “Call for Communication” hit its goal of attaining 1,000 signatures. This was sent to Valve, but the petition garnered no response. Comically, Peter Molyneux even wheeled his son onto the camera to ask Valve for answers. It didn’t work.

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Again, 2011 saw the usual flurry of rumors and conjecture, with theories of Episode Three‘s absence being attributed to extra work on other projects, including Portal 2. This rumor was strengthened somewhat as more Episode Three content was found within Portal 2‘s SDK. There were also rumors and almost-official confirmations that Valve was done with traditional single-player games, with even Gabe Newell saying Portal 2‘s campaign may be the last. Fans shook with fear.

Newell clarified this with some less fear-inducing comments during an interview with a student. In the interview he explained his wish to simply make games more social, enhancing the single-player experience with added social features. He never intended to ditch solo play. Half-Life fans could breathe again.

“It’s not about giving up on single-player at all. It’s saying we actually think there are a bunch of features and capabilities that we need to add into our single-player games to recognize the socially connected gamer.”

Sadly, the good news didn’t continue, as Valve once again failed to show any games, importantly, Episode Three, at E3. Newell also took a different approach to the never-ending stream of questions about Episode Three, and simply refused to talk about it, at all.

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Eventually, yet another code leak was found, this time in the Dota 2 beta client. It was quickly debunked by Valve employee Chet Faliszek, who said any mention of Episode Three or HL3 was simply coincidence.

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Towards the end of the year, the rumors and outright craziness began to flow freely from the Internet. Half-Life 3T-Shirts were seen out in the wild (they were fake, of course). Some thought a lot of the coverage was an elaborate ARG (Alternate Reality Game).

Once again, Faliszek jumped in to debunk these reports as nothing but trolling. His post on the Valve Forums was precise, and to the point.

“You are being trolled.

“There is no ARG.

“Wheatley’s speech was set in Portal 2 fiction – that is all.

“There has been no directive from Gabe to leak anything. That is all false.

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“I just want to say this so there is no confusion. This is the community trolling the community nothing more. While it is nice to see people excited about anything HL, I hate seeing people be trolled like this.”


Following a rather ballsy movement by fans to send a whole load of crowbars to Valve’s office, Valve still refused to talk about Episode Three, or Half-Life 3, as it had become more popularly known. This is despite more petitions, which had spread to Steam. In fact, Steam was used in another attempt to force Valve’s hand. On January 31, thousands upon thousands of Steam users all played Half-Life 2 during the day. This forced the game back to the 11th most popular title on Steam. Valve still didn’t comment.

Gabe Newell partly broke Valve’s silence during an interview with Develop. Newell talked about a game called Ricochet 2, which was clearly code for Half-Life 3. He basically said that Valve wanted to avoid talking about things too far in advance, and discussed the difficulty of revealing information on a project that’s constantly changing.

“We end up changing our minds as we’re going through and developing stuff, so as we’re thinking through the giant story arc which is Ricochet 2, you might get to a point where you’re saying something is surprising us in a positive way and something is surprising us in a negative way, and, you know, we’d like to be super-transparent about the future of Ricochet 2,” he said.

“The problem is, we think that the twists and turns that we’re going through would probably drive people more crazy than just being silent about it, until we can be very crisp about what’s happening next.”

With the ‘Half-Life 3: Confirmed’ meme gaining steam, and more trolls and jokes flooding online, no fresh news on consequence surfaced, and another E3 came and went with no sign of Episode Three. Even worse, Half-Life 3 was advertised as being present at Gamescom. It wasn’t, and Valve revealed this was simply a mistake, and a false listing.

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The year wound up with Newell continuing to refuse to talk about Episode Three, and a rumor did the rounds that Half-Life 3 had evolved into an open-world game. Valve remained stoic and silent.


Amidst the usual assortment of rumor, 2013 was interesting as a leak disclosed quite a bit of information on the internal goings on at Valve. The leak appeared to divulge information from a mailing list, and from the company’s internal bug tracking software, JIRA.

The leak mentioned Left 4 Dead 3, the Source 2 engine, and Half-Life 3, with a mail group of 42 employees. What was key here was the size of the teams involved. Left 4 Dead 3 had multiple mail groups set up for it, whereas Half-Life 3 had only one. This seemed to point to Left 4 Dead having a much larger focus, with Half-Life 3 only having a small presence.

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Later in the year, in October, the JIRA system was delved into once more. This time it was found found that more user groups had been added to Half-Life 3, along with a new group called Half-Life 3 Core. This included former Valve employees, designer Adam Foster and Kelly Bailey. This discovery lead to much speculation that work on Half-Life 3 was picking up, and Valve was putting more effort into the project behind the scenes.


Not much occurred of any real note during 2014. In May, however, hopes were fueled when former Valve staff member, Minh Le, who co-created Counter-Strike mentioned seeing a game that appeared to be part of the Half-Life universe. He mentioned this during an interview with goRGNtv. He said it wouldn’t surprise him if they were working on it.

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This brings us to 2015, which began with another code leak, this time from Dota 2‘s Workshop Tools. Within an important dll file (model_editor.dll), users found a command with some apparently telling parameters. This read ‘physics_testbed.exe -game hl3 -open.’ Fans obviously took this as an obvious pointer to Half-Life 3, although there was no way to tell how relevant this code was.

This leak was followed by another much later. Several files were found within the Source 2 version of Hammer, the engine’s level editor. One of these files was hl3.txt. This contained information relating to porting Half-Life 2 code to Source 2, along with quest systems and AI changes. There was even mention of VR mechanics and the use of a similar AI director, as used by Left 4 Dead. Various in-game entities are also mentioned, with many relating to the supposed quest system, and other features that are labeled as “HL3 only.”

Surprise! Nothing came of it…

2016 – Now

That brings us up to date, and even now, Valve still hasn’t committed to anything related to Episode Three or Half-Life 3, almost a decade after Episode Two ended. In early 2017, a report from Game Informer suggested that Valve had no plans to develop a new Half-Life game, despite the fact that several teams have tried to get a new project jumpstarted. That said, Newell revealed earlier this year that Valve was back to making games, although no other projects beyond its new CCG, Artifact, were announced.

Is Valve purposely waiting ten years before we see anything related to the game? Is the game being worked on? Does Half-Life 3 exist? With so much rumor and conspiracy-laden theory, it can be very hard to separate fact from fiction, and there’s only going to be one way to know for sure, and that’s if and when Valve comes out of its silence. Half-Life 3 confirmed in 2018? Maybe. Maybe not.

What I can say, however, is that Half-Life 3 is coming. How can it not? Valve is one of the most business-savvy games companies out there. Steam has become a massive success, spearheading the digital-distribution market, and other releases, like Left 4 Dead and Team Fortress have become classics. Both Gabe Newell and Valve’s higher-ups know all too well that Half-Life 3 will probably break the internet and all sales records, and unless all concerned have had lobotomies, Half-Life 3 is on the cards, it’s just a matter of when.

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With Steam and other products doing so well, Valve is in no hurry, and with such a loved license, the team will want to make sure it’s nigh-on perfect, and that takes time. A lot of time, sure, but time nonetheless.