Half-Life 2: Episode Three was to be the third episode in the Half-Life 2 story arc, and the final entry in the Half-Life 2 series to follow protagonist Gordon Freeman as he leads a human resistance against the Combine forces. Although Episode Three was to be the last Valve-developed episodic Half-Life 2 title, senior members of Valve Corporation have confirmed that Episode Three would not have been the end of the Half-Life franchise.
Valve originally announced Episode Three in May 2006, shortly before the release of Half-Life 2: Episode One. It was known at the time that episodic content for Half-Life 2 was in development, with Gabe Newell stating that he viewed the episodes as being comparable to a third entry in the Half-Life series, however it was not previously known how many entries were planned. Upon announcement, Episode Three was given a tentative release window of Christmas 2007, however complications and frustrations with the episodic format led Episode Two to release later than planned, and largely uprooted plans for Episode Three.
Little is known about what the game would have been, save the easy assumption that it would follow the events of Half-Life 2: Episode 2, as well as details gathered from concept art, such as implications that a fight against a Combine Advisor may have been planned at some point. As well, concept art and foreshadowing from Episode Two suggested that the game would have been set far away from City 17, perhaps in a heavily icy climate such as the Arctic (hailing back to the original design concept for Half-Life 2), and that the Borealis would have played some role in the story. There was also speculation that Aperture Science, and the Portal franchise as a whole, would have played a major role in the game, due to statements by Gabe Newell that Chell would be important to the Half-Life universe, as well as the appearance of the Borealis in Portal 2.
In an interview with Edge, Newell noted that Episode Three would probably see a change to survival horror over the franchise's pure action roots. Newell said the series had to broaden its "emotional palette." "I feel like we've gotten away from genuinely scaring the player more than I'd like, and it's something we need to think about, in addition to broadening the emotional palette we can draw on." The game will explore the fans' fears. When asked what he thinks his aging fan-base fears the most, Newell said, "The death of their children. The fading of their own abilities." Newell has confirmed that Freeman would have been unchanged in the next game with regards to his superficial behavior -- he will not talk, and he will remain "an arm and a crowbar." "Right now," said Newell, "making your companions more interesting and compelling seems a more fruitful avenue to explore."
According to Gabe Newell, there were also plans in consideration for Episode Three to introduce a deaf character who will interact with Dog and Alyx via sign language (with Alyx knowing sign language from her experience training Dog). Some speculated that this may have come alongside better support for players with hearing impairments, though nothing about such improvements was stated by Valve.
Development History and Rumors
Valve's silence throughout the development of Episode Three led the title to largely be termed "vaporware." Although some information, usually in the form of one line responses, was put out by senior ranking members of Valve, their comments were typically little more than confirming that the game still existed in some form. Episode Three was effectively cancelled in 2011, due to Valve moving on from the episodic format, however, details implying the development of a third Half-Life entry, whether Episode Three or Half-Life 3, would continue to leak out every once in a while throughout the 2010s.
July 2010 - Alien Swarm Leaks
Following the release of Valve's free-to-play game Alien Swarm, users found what appeared to be several files related to Episode Three present in the Alien Swarm SDK (software developer kit). Among the files were labels such as "Ep3 Fire Cover Position," "Ep3 Brain Cover Position," "Ep3 Brain Regenerate Position," "Ep3 Spawn Generator Position," and "Aperture: Nest" (potentially referencing Aperture Science, the central corporation from the Portal franchise, however also potentially literal, as in "a hole"). As users continued to look through the SDK, more details were found which seemed to line up with Episode Three, including code for a "blob_brain" entity, with code for it to become frozen, fitting for the supposed Arctic setting of Episode Three. There are also references to Antlions, Zombies, the Gravity Gun, the Combine, and a file labeled "HL2_EPISODIC." Also present are two types of weapons from the Half-Life series: the Tau Cannon, and Flachettes, the type of projectile fired by the Hunters. Valve has a long history of using obscure methods to hint at current projects or secrets about upcoming games, leading some to interpret these files' presence as an official hint, rather than an accidental leak.
September 2010 - Gabe Newell PC Gamer Interview
In an interview with PC Gamer magazine, Gabe Newell promised that Valve would have "three big surprises" to reveal over the twelve-month period to September 2011.
"I can guarantee you people are going to be surprised at stuff we do," Newell said. "That isn't going to stop anytime soon. I'm just laughing because…people will be shocked again."
Newell later confirmed to PC Gamer that Episode Three is in active development and has been for a long time. Newell also revealed that Valve is doing studies on biometrics in house in order to better understand the player base.
June 15, 2011 - Steam Forums Rumor
A Steam Forums thread entitled "Half-Life 3 is official confirmed!" was posted, in reference to Valve employee Mike Dussault's resume seemingly confirming that Dussault had done world programming for Half-Life 3. The post, which was quickly removed by forum moderators, follows:
"Mike Dussault, a long time programmer at Valve, recently left the company. I didn't know him until last week. Let me introduce myself. I'm a freelance artist. I do contract work for a studio in Seattle, through the internet. They have a client access system on their site. I came across Dussault's resume, while browsing the files section. Now, I know you're all curious about Valve's in-house development, but I'm only going to talk about the Half-Life series.
According to his resume, Episode Three was put on hold when Valve decided to move away from the episodic model in late 2007, right after Episode Two's release. He was a technial advisor on a cancelled Half-Life title, made outside of the company. Dussault's work on Half-Life 3's world programming, and the scripting system (between 2008 and 2010) is also mentioned in the resume."
They also discovered that Mike Dussault was in fact a real employee at Valve and left the company over a year prior to the post. It was also rumored that Dussault had been "technical advisor on a cancelled Half-Life title made outside of the company," in supposed reference to Arkane's cancelled Episode Four, originally announced in 2006. Combined with Valve's previous statements that they had encountered trouble with the episodic format, the forum post seemingly gave credence to the idea that Episode Three's development had become Half-Life 3.
April 13, 2012 - Gabe Newell Podcast Appearance
During the first episode of the 7 Day Cooldown Podcast, Gabe Newell was interviewed, and addressed the state of development for the next Half-Life game. However, Newell referred to the game as "Ricochet 2", in reference to Valve's 2000 multiplayer mod, Ricochet. In the interview, Newell said the following:
"In terms of Ricochet 2, we always have this problem that when we talk about things too far in advance, 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. 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."
June 19, 2013 - JIRA Server Issues
An error with JIRA, a proprietary issue-tracking product used by Valve for project management, led to external parties briefly gaining access to Valve's internal tickets. The tickets listed a variety of development groups inside of Valve, among which were groups for Left 4 Dead 3, Source 2, and Half-Life 3. At the time of the error, the group for Half-Life 3 had 42 members (out of a total of around 300 people employed by Valve at the time). Among the employee listings for Half-Life 3 were noteworthy names from previous Half-Life and Valve titles, including writer Erik Wolpaw, and level designer Dario Casali.
August 25, 2017 - Marc Laidlaw's Epistle Three
In January of 2016, Half-Life writer Marc Laidlaw departed from Valve, citing his age and a desire to return to writing original stories. Later, on August 25, 2017, Laidlaw published a blog post entitled "Epistle Three" on his personal blog. The blog post is written from the perspective of "Gertrude Fremont, Ph.D", writing to "Playa". It was quickly realized that Epistle Three was one of Laidlaw's outlines for Episode Three, albeit with the names and genders of characters changed around. The post confirms a number of rumored details about the game's plot were one planned, including the Arctic setting, and the plot revolving around the Borealis.
The letter picks up after the death of Elly Vaunt, with Fremont and her companion Alex Vaunt resolving to head to the Antarctic, in search of the Hyperborea (the original planned name for the Borealis). En route, the duo's plane crashes, forcing them to walk to the last known coordinates of the Hyperborea. Soon after finding the ship, which actively phased in and out of reality, the two were confronted by a group working under Dr. Wanda Bree, who had been saved by The Disparate some time following their last encounter, her consciousness placed into an alien slug. Following a fight with Bree's underlings, Bree begged for death, being disgusted with the slug form she now inhabited. Soon after, the two found Jerry Maas, who attempted to explain his past behaviors, as well as offering Fremont resonance keys, the only way to stabilize the Hyperborea, should Fremont help Maas out of his cell. The three proceeded to the Hyperborea, stabilizing just long enough for them to get onboard before it resumed blinking across reality. Now stuck on the reality-warping Hyperborea, scenes from the rest of the world blinked in and out of view as the group struggled to gain control of the ship. Following an argument among the three as to what should be done, it was decided that Elly's dying wish, that the Hyperborea be destroyed, should be followed. Jerry attempted to betray the decision and force the ship to land, only for Jerry to be shot by Alex, and the ship rerouted to the Disparate command center, set to self-destruct. As the Hyperborea began to detonate, Mrs. X appeared, however she would only take Alex with her, leaving Fremont by herself on the exploding ships. As the ship continued it's self-destruct, the Ghastlyhaunts intervened, depositing Fremont safely elsewhere.
The letter begins and ends with a tongue-in-cheek reference to the development of the Episode Three, referencing Laidlaw's departure from Valve, a previous letter from "Fremont" entitled "Epistle Two", and closing with the implication that Epistle Three was Laidlaw's final involvement with the Half-Life series, although Laidlaw would later consult on the writing for Half-Life: Alyx.
November 18, 2019 - Half-Life: Alyx
In a surprise Twitter post on November 18, 2019, Valve announced a new, VR-exclusive Half-Life title: Half-Life: Alyx. While not Episode Three or Half-Life 3, Alyx was the first official Half-Life game in roughly 13 years, having launched in March 2020. As such, the announcement and subsequent release renewed Half-Life fans' interest and demand for a third entry in the series. As well, certain dialogue lines from the game have been interpreted as meta-textual acknowledgement of the troubled development of a third Half-Life game, with some events in the game heavily implying that development on Half-Life 3 could some day resume.
Around the game's launch, Valve would give a number of details in interviews regarding what happened to Episode Three, and the later-rumored Half-Life 3, explaining that internal troubles, scope creep, and issues with the episodic development cycle led to the project never seeing the light of day.
July 9, 2020 - The Final Hours
On July 9, Geoff Keighley, in collaboration with Valve, released The Final Hours of Half-Life: Alyx, a textual documentary following the development of Half-Life: Alyx, as well as a number of projects Valve had worked on in the years between Portal 2 and the release of Alyx. While not the sole focus of the documentary, The Final Hours does discuss Episode Three and the subsequent attempt at Half-Life 3, with a project known as Half-Life 3 starting development in early 2013, before being cancelled in 2014. According to the documentary, the plans for Half-Life 3 involved a mix of hand-crafted story segments interspersed by procedurally-generated environments and missions.
The Final Hours also discusses a number of other planned Half-Life projects, including a scrapped VR game set aboard the Borealis as it warped through time, as well as a gallery-shooter prototype set in the Half-Life universe, originally intended for The Lab before being scrapped due to time constraints, which later inspired aspects of Half-Life: Alyx.