I'm pretty sure that Vampire: The Masquerade – Bloodlines is the Source engine game the boys were thinking of. They were contractually obligated to not release it before Half-Life 2, but there wasn't ever going to be a contest in terms of looks or physics. Thanks to the realities of development cycles, they were working on a feature-incomplete version of the Source Engine and had to cobble together large chunks of code (including the lighting system (!!) ) on their own when they weren't sure that Valve could deliver things on time.
The Beasters overlooked one important 80s cop movie in this episode: Alien Nation.
Imagine District 9, except instead of a South African documentary, it's a cornball buddy-cop story about an old-timer who gets partnered with the first extra-terrestrial to graduate from the Los Angeles police Academy. Oh, and it's also a noir film.
TheDarkOn3's comments