Newell: Valve building Source 2 engine, Ricochet 2 is in development

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Valve head honcho Gabe Newell got a visit from fans on's /v/ board for his birthday, and after paying $2.50 to unlock a real-life Mann Co. crate with a TF2 Soldier hat inside, he stuck around to talk shop. The first question (Newell specifically warned against questions about Half-Life 3) was, paraphrased from the above recording, "Is Valve working on a new Source engine?"

Newell answered, "We've been working on new engine stuff for a while." The audio then became garbled, but subtitles read, "We've just been waiting for a game to roll it out with." Regardless of the incomprehensible audio, someone asked a straightforward follow-up question: "Is it more than just an extension to Source? Like, is it an entirely new engine?"

"Yeah," Newell said.

In August a group uncovered code for a "Source 2 engine" in the Source Filmmaker application, alongside "Source 2 tools" icons. The engine was labeled "next-gen."

Also during /v/'s Valve takeover, Newell and co. confirmed that Ricochet 2 is in development.
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