This may be a false alarm, but the story for Half Life 3 has been leaked. A former Valve employee, Marc Laidlaw, who wrote the entire Half Life series has posted what he claims to be the storyline for the long awaited game.
It’s difficult to say if this is the real deal, although it has been verified that Laidlaw did actually post the story on his personal blog. That blog has been taken down by now; possibly due to the sudden influx of traffic from the news. Fortunately, the entire story has been mirrored to GitHub.
Laidlaw later claimed that the story is simply a work of fanfiction; although it’s difficult to believe the claim. Especially since he was responsible for the rest of the game series, and had recently left Valve.
Still, this shows that Valve had at least explored the idea of creating Half Life 3 (or Half Life 2: Episode 3). It’s a mystery as to why the company has been sitting on the game. Although the popularity of Dota 2 may have something to do with it.