Gabe Newell said that completing Half-Life 2: Ep. 3 to end the story would have been 'abdicating [Valve's] obligations to gamers.'

Rumors about Half-Life 2: Episode 3's contents and why it wasn't finished have been circulating for years. But a new documentary for Half-Life 2’s 20th Anniversary, released on the occasion of its 20th Anniversary, is particularly revealing. It shows us unfinished Episode 3 weapons and enemies, including an ice-ray that was "kind of like Silver Surfer mode," and asks some of its developers why it wasn't finished.

Half-Life 2 was followed by two episodic expansions, which were supposed to form a trilogie. However, after Episode 2, Valve abandoned Half-Life for 13 years. They only picked it up again in 2020, with the VR game Half-Life Alyx. Since then, speculation about Episode 3 or the fabled Half-Life 3 has become a beloved pastime on PC gaming forums.

It's not a surprise that Episode 3 didn't work out. The main reason is that the developers didn’t know how to improve the game design enough to make them feel like it was worth their time. The ice gun and blobs that used Portal tech were not up to Valve standards of innovation. Half-Life 2 level design David Riller said in the documentary that they were experiencing element fatigue and needed to "go larger or do something different."

Riller said, "I think we'd really explored a lot that made sense in Half-Life's universe and setting." Marc Laidlaw agreed, stating that Arkane struggled to create new things for its Ravenholm spinoff.

The Episode 3 team stopped working on the next Half Life campaign to help with shipping. But, like a hobby project that is put aside for a few minutes and ends up collecting dust for years, this was the end of the project.

Engineer David Speyrer said that it was "tragic, and almost comical," that after Left 4 Dead went out of the door they felt they'd missed the opportunity to finish Episode 3, and that they needed to make a brand new engine if the series was to continue.

Speyrer said, "That seems so wrong in retrospect." "We could have definitely gone back and invested two years in Episode 3."

Valve doesn't seem to be in complete agreement on whether or not they should have just finished Episode 3 and concluded the story. Gabe Newell, the founder of Valve, said that completing the story by completing Episode 3 would have been cheating.

Newell said, "You can't be lazy and say 'Oh we're moving the plot forward'." "That is a way to avoid your obligations to gamers. They love the story, yes. They love it in many different ways. You know, we could have shipped it, because it wouldn't be that difficult. I was unable to understand the failure, my own failure. "I couldn't understand why doing Episode 3 would push anything forward."

The documentary ends with a positive: Valve has done other things, such as released Dota 2 or the Steam Deck. For those who are not satisfied with that conclusion, there is a very meager (classic Valve), tease at the end about the future of Half-Life: Newell simply saying, "sure, yeah, there's opportunities to do more Half-Life things."

The Half-Life 2 Anniversary Documentary is available on YouTube. There's also a large patch that adds in-game comments.