Valve president, Gabe Newell, has confirmed that the company is working on Source 2 engine, but it still doesn’t have a game to roll it out with.
The announcement was made during Newell’s surprise birthday party which was organized 4Chan forum members. In addition to a giant birthday card signed by many of the board members, the guys actually gave Newel a Mann Co. Supply Crate, which he had to pay $2.50 to unlock and receive a combat helmet similar to the one worn by the Team Fortress 2 soldier.
Gabe stayed and chatted with the partygoers under one condition: no Half-Life 3 questions. One fan asked if Valve was working on a new Source engine, and Gabe replied that "We’ve been working on Valve’s new engine stuff for a while. We’re probably just waiting for a game to roll it out with."