Geoff Keighley’s Half-Life: Alyx - Final Hours documentary book contains interesting insight into just what Valve has been doing in all the years the developer hadn’t released a game. As reported by Ars Technica, Half-Life 3, unsurprisingly, is one of several projects Valve worked on for a while before abandoning for one reason or another. The Half-Life 3 described in Keighley’s account, however, wasn’t quite the sequel fans may have been expecting. That Half-Life 3 was inspired by Left 4 Dead in some ways, and by rogue-lites in others. The game is said to have been a combat-focused affair where you go from one procedurally generated room to another taking out randomly spawning enemies. In between these supposed dungeon dives, the game would advance its narrative, through cutscenes and set pieces.
Valve was working on the game in the early 2010s, but couldn’t ultimately finish it because of problems with the then-in-development Source Engine 2. By the time engine development picked up steam, Valve had shifted to other Half-Life projects, such as Marc Laidlaw’s Borealis, which was a VR game set on the Borealis boat. Some of that game’s plot details eventually got out there, thanks to Laidlaw’s “Epistle 3” post. The good news is that Valve developers are no longer “afraid of Half-Life,” and they plan to make more Half-Life games. Half-Life: Alyx - Final Hour has much more, of course, and you can buy it and read the whole thing yourself at the link above.