Half-Life 2: Episode Three
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Half-Life 2: Episode Three was the planned third and final installment in the Half-Life 2 episodic trilogy. It was announced in May 2006 with a projected release in late 2007 or 2008. Over the years, it became one of the most highly anticipated but ultimately unreleased titles in gaming history — often cited as a classic example of vaporware[1].
With the release of Half-Life: Alyx in 2020, which established itself as a prequel rather than a direct continuation of the storyline from Episode Two, the possibility of Episode Three being released in its originally intended form became increasingly unlikely. The game was officially confirmed as cancelled on November 16, 2024 — the 20th anniversary of Half-Life 2 — when Valve released a retrospective update and behind-the-scenes content, including a documentary, detailing the history and eventual cancellation of the project[2][3].
Footage included in the update showed several assets developed for the episode, including two previously unseen weapons:
- an unidentified weapon, which featured a model later reused in Portal 2 as a cut Paint Gun.
- The Ice Gun, a weapon capable of freezing Combine Soldiers, forming ice walls, and creating ramps to traverse environmental obstacles.
Development history
Following the release of Half-Life 2 in November 2004, Valve released Episode One in June 2006, and Episode Two in October 2007. The ending of Episode Two, where the G-Man tells Gordon Freeman to "Prepare for unforeseen consequences," strongly implied that Episode Three would follow. Initial projections suggested a 2007 or 2008 release window.
Reports indicate that active development on Episode Three began after Episode Two's release and continued for several years. However, the project gradually lost priority within Valve. According to the 2024 Half-Life 2 Anniversary Documentary[2], development effectively stalled around 2009. Key personnel were diverted to help finish Left 4 Dead, and the team experienced "element fatigue", feeling they had explored much of what made sense in the Half-Life universe and setting[3]. Engineer David Speyrer noted it was "tragic and almost comical" that after Left 4 Dead shipped, the team felt they'd missed their opportunity and believed they needed a new engine to continue, which seems wrong in hindsight[3].
A 2017 GameInformer retrospective article detailed the history of unreleased Half-Life games, noting that Episode Three's development was suspended as Valve's priorities shifted[7].
Setting and story
Hints from a 2007 interview suggested that Episode Three would have taken place in or near an Arctic Research Base[5]. This setting was intended to follow up on the mystery of the Borealis, the research vessel discovered at the end of Episode Two, and to conclude the overarching narrative involving the Resistance, the Combine, and the fates of Gordon Freeman and Alyx Vance.
Valve indicated that Episode Three was intended to provide a conclusion to the Half-Life 2 story arc, though it was not necessarily meant to conclude the entire Half-Life franchise[6].
Former Valve writer Marc Laidlaw published an unofficial epilogue titled "Epistle 3" on his blog in 2017, offering fans a glimpse into one possible direction for the story's conclusion[8].
Source code evidence
As of February 18, 2025, portions of Episode Three's code were found in the updated 
Source SDK repository on GitHub. The relevant files are located in the following directory:
`
game/server/episodic/Episode3`
These files contain entity definitions, scripted sequences, and early gameplay logic, confirming that a working build existed internally during development.
Additionally, a significant portion of Valve's source code was leaked online in April 2020. This leak contained remnants of Episode Three's development files, including early concept art, design documents, unfinished game assets, map files, and scripted sequences outlining potential story beats. These leaked materials confirmed that Episode Three had progressed beyond the conceptual stage and that a functional prototype existed during development, although it was never completed to a releasable state.
Half-Life: Alyx and its impact
The release of Half-Life: Alyx in March 2020 significantly altered the trajectory for the Half-Life series. Rather than continuing the linear episodic storyline from Episode Two, Alyx was developed as a standalone virtual reality prequel set between the events of the original Half-Life and Half-Life 2. This strategic decision effectively diminished the likelihood of a traditional Episode Three release, as Valve chose to explore new narrative and technological directions rather than conclude the existing storyline as originally planned.
An IGN article detailing cancelled Valve projects highlighted the company's pattern of moving away from announced projects towards new initiatives[4].
Official statements
Over the years, Valve representatives made occasional indirect comments regarding Episode Three, but the official confirmation came with the 2024 documentary. Prior to this, statements included:
- Gabe Newell reportedly expressed in a PC Gamer interview that "finishing Half-Life 2 Episode 3 just to conclude the story would've been copping out of Valve's obligation to gamers"[3], suggesting the team felt that simply wrapping up the story would not meet the expectations they had set for innovation. He reiterated this in the 2024 documentary, stating his personal failure was being stumped and not figuring out why doing Episode 3 was pushing anything forward[2].
- Marc Laidlaw, the former lead writer at Valve, published an unofficial epilogue titled "Epistle 3" on his blog in 2017, offering fans a glimpse into one possible direction for the story's conclusion[8].
The 2024 Half-Life 2 Anniversary Update and Documentary finally provided the definitive confirmation of the project's cancellation[2][3].
Legacy
Although Half-Life 2: Episode Three was never completed or released, it maintains a significant place in gaming culture as one of the most famous examples of an unreleased game. Its enduring legacy is fueled by the passionate fanbase and the tantalizing prospect of a conclusion to Gordon Freeman's story. Interviews with former Valve developers, community analysis of leaked materials, and fan projects have kept interest alive and provided insights into the potential narrative and gameplay concepts that were in development.
The game is frequently cited in discussions about vaporware, representing a major unfulfilled promise in the gaming industry[1].
See also
- Category:Half-Life 2: Episode Three entities – leftover entities from Episode Three found in the Source SDK
Half-Life 2: Episode Three on Combine OverWiki
Half-Life 2: Episode Three on Wikipedia
References
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