Valve boss Gabe Newell has confirmed the Half-Life studio is indeed working on a new iteration of its Source Engine reports CAG. Asked by visiting 4chan members if the company is working on 'Source 2', Newell replied (captured in the video below): "We've been working on new engine stuff for a while, we've just been waiting for a game to roll it out with." Asked if that meant an "entirely new engine" rather than a simple extention, the Valve boss replied: "yeah."
Source was introduced with Half-Life 2 in 2004, and has since been tweaked and upgraded with the releases of Half-Life 2: Episode Two, Left 4 Dead and Portal 2.
The 'Source 2' news hardly comes as a surprise of course; earlier this year more than 60 references to a "next-gen" engine were discovered in script files behind recently-released Source Filmmaker.
The Counter-Strike developer has previously bragged its engine is "considered the most flexible, comprehensive, and powerful game development environment out there. And it's about to get even better."