From Valve Developer Community
This occurs when the Current Game is incorrectly configured.
This can happen when:
- The Game Directory is set incorrectly so the tools cannot find the
- A gameinfo.txt file for the game is missing or incorrect.
- Installing/Restoring HL2 games from a backup that was created via the "Backup Games..." menu, but not having actually played the games after the install (HL2, EP1 etc).
How to fix this problem:
- First and foremost run the game (HL2, EP1 etc) at least once before running the SDK tools like hammer. Running the games for the first time will create the gameinfo.txt and related files that are used by the sdk tools.
- If this is a custom MOD, make sure the Game Directory is set correctly, and that a valid gameinfo.txt is present.
- Try running the game you're editing for once from the Play Games window.
- Try to Reset the Source SDK Game Configuration.
- If that does not work, Reinstall the Source SDK installation.