Yesterday Valve founder Gabe Newell held an AMA with Reddit. In this AMA Newell did confirm that Valve is working on unannounced games and that a Half-Life related title is not out of the question.
As expected Half-Life 3 was a topic of discussion. Sadly Newell did not confirm the development of Half-Life 3, but did say that the company is working on at least one “fully-fledged” single-player title. When directly asked about Half-Life 3 Newell stated “The number 3 must not be said”. While we do not know if Half-Life 3 is being worked on he did give a little bit of hope oh a title being based in the Half-Life universe.
Besides the Half-Life 3 talk, Newell did say that the unannounced game will run on the Source 2 engine:
“We are continuing to use Source 2 as our primary game development environment. Aside from moving Dota 2 to the engine recently, we are using it as the foundation of some unannounced products”, he said during his AMA. “We would like to have everyone working on games here at Valve to eventually be using the same engine. We also intend to continue to make the Source 2 engine work available to the broad developer community as we go, and to make it available free of charge.”