A new version of the Source engine could be in development at Valve, if indications from bits of code discovered by fansite ValveTime.net are true. Script files within Source Filmmaker make several references to engines, including "Source 2," and files in the program previously discovered by the site also appear to refer to Half Life 2: Episode 3.
Line 1387 of Source Filmmaker's vproj.py file states ''Return an str with the current engine version. If key doesn't doesn't exist, assume 'Source', otherwise invalid -- assume next-gen 'Source 2'.'' Five other references to "Source 2" appear in that file alone, and Valve's website itself vaguely teases the engine is "about to get better." In a different file, references to a "ep3/models/characters/alyx" path suggest the existence of the long-speculated Half-Life 2: Episode 3 and series character Alyx Vance.
The last entry in the franchise was 2007's Half-Life 2: Episode 2. Valve co-founder Gabe Newell implied in April that work on the company's flagship franchise continues. He said it is careful to keep a tight lid on information to avoid missing expectations, however, after the notoriously troublesome development of Half-Life 2. GameSpot has reached out to Valve for comment on the code's implications, but had not received a response as of publication time.